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      Question

      XYZ Ltd. plans to buy back 10% of its paid-up equity

      capital. It has reserves of ₹20 crore and total debt of ₹80 crore. As per Companies Act and SEBI rules, is this buyback allowed?
      A No, as debt exceeds limits Correct Answer Incorrect Answer
      B Yes, under board approval Correct Answer Incorrect Answer
      C Allowed if post-buyback D/E < 2:1 Correct Answer Incorrect Answer
      D Permitted only via tender offer Correct Answer Incorrect Answer
      E Only through stock exchange Correct Answer Incorrect Answer

      Solution

      Post-buyback debt-equity must not exceed 2:1. Check reserve sufficiency and compliance.

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