Buy Back of Shares Quiz

Buy back of shares refers to the process in which a company repurchases its own shares from the market, usually as a means to return value to shareholders or to prevent a hostile takeover.

The purpose of a buy back of shares is to reduce the number of outstanding shares, increase the ownership stake of current shareholders, and improve the company's financial ratios.

A buy back of shares can potentially lead to an increase in the company's stock price due to the reduced supply of shares in the market, which may signal confidence in the company's future prospects.