29 January 2010
Section 77A, 77AA and 77B of the Companies Act,1956 contain provisions of Buy Back of shares by a company.
A company may buy back the shares issued by it on account of one or more of the following reasons
i. To increase promoters holding ii. Increase earning per share iii. Rationalise the capital structure by writing off capital not represented by available assets. iv. Support share value v. To thwart takeover bid vi. To pay surplus cash not required by business As a strategy to maintain the share price.
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