Which of the following refers to the situation in which a company enters the market to purchase its own shares?
A)Share buy- back
B)Share dividend
C)Share buy- up
D)Share buyout

Question

Quizplus · Accepted Answer

Share buy-back refers to the situation in which a company enters the market to purchase its own shares. This is done either to reduce the number of shares outstanding or to send a signal that the company believes its shares are undervalued. Share dividend refers to the distribution of additional shares to existing shareholders, share buy-up is not a financial term, and a share buyout refers to the acquisition of a company by another company.

Which of the Following Refers to the Situation in Which