New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Which of the following strategies involves a company

    buying back its own shares from the market, potentially increasing the value of remaining shares?
    A Equity financing Correct Answer Incorrect Answer
    B Stock split Correct Answer Incorrect Answer
    C Share buyback or repurchase Correct Answer Incorrect Answer
    D Dividend payout increase Correct Answer Incorrect Answer
    E Initial Public Offering (IPO) Correct Answer Incorrect Answer

    Solution

    A share buyback or repurchase is when a company buys back its own shares from the open market. This reduces the number of outstanding shares, potentially increasing the value of the remaining shares by improving earnings per share (EPS) and signaling confidence in the company’s future.

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