📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    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.

    Practice Next
    More Accounts Questions
    ask-question