A company purchase its own shares of Rs 5,00,000 from the market. What this process is called?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Buy-back of Shares
Buy-back of Shares (Correct): This is the strategic process where a company repurchases its own outstanding shares from the open market or existing shareholders. This action reduces the number of shares in circulation, which typically increases the Earnings Per Share (EPS) and signals management's belief that the stock is undervalued.