Multiple choice

Which of the following amounts to buy-back of shares by a company?

  1. Redemption of preference shares

  2. Forfeiture of shares

  3. When company's own shares are purchased from the open market, by the company

  4. Acceptance of valid surrender of shares
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 When own shares are purchased by the company from the open market at the prevailing market price as any other person would purchase them, it means that the company has purchased its own shares and it amounts to buy-back of shares.

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