Share Buyback- How It Works And Stands To Gain From It? | Business News | ET Now скачать в хорошем качестве

Share Buyback- How It Works And Stands To Gain From It? | Business News | ET Now

We often hear the term "buyback" when we are reading about the stock market. Let's understand why companies opt for a buyback, how this reflects on the company's stocks price and what this could mean for existing shareholders. A buyback of shares is a corporate action event wherein a company purchases its stock from the existing shareholders at a price higher than the current market price. The buyback of shares in India is generally done either through a tender offer or an open market offer through the Stock Exchange. There are many benefits of a share buyback- both to the company as well as the shareholder. Let's understand why companies opt for a buyback: When a company opts for a share buyback, it is simply repurchasing its own stock back from its investors. A buyback can help a company increase the share prices of their undervalued stock, as the supply of shares available in the market now will reduce, which will boost the price. The buyback also helps increase the promoter's stake and thus acts as a defense strategy to protect them from the threat of hostile takeovers. It can help the company meet its optimum debt-equity ratio, but most importantly, the buyback reflects a healthy financial status of a company and builds investor confidence in the company- both present and potential. Now let's see how a buyback could benefit the existing shareholders of the company: The buyback provides an opportunity for shareholders to exit at a price higher than the current market price. It increases the percentage of shareholders' ownership in a company due to a reduction in the total number of outstanding shares. But most importantly, the capital gains made in buyback are exempt from tax for the shareholders. So that is why share buybacks are fruitful for both the company as well as the shareholders. #buyback #buybackshares #whatisbuybackshares Subscribe To ET Now For Latest Updates On Stocks, Business, Trading | ► https://goo.gl/SEjvK3 Subscribe Now To Our Network Channels :- Times Now : http://goo.gl/U9ibPb The NewsHour Debate : http://goo.gl/LfNgFF To Stay Updated Download the Times Now App :- Android Google Play : https://goo.gl/zJhWjC Apple App Store : https://goo.gl/d7QBQZ Social Media Links :- Twitter - http://goo.gl/hA0vDt Facebook - http://goo.gl/5Lr4mC G+ - http://goo.gl/hYxrmj Website - www.etnownews.com