What should a company do if it wants to reduce the number of shares outstanding?
Issue more debt
Pay cash dividends
Invest in more projects
Repurchase shares
Which one?
Answers
Answered by
4
Answer:
HE OR SHE CAN JUST DENY THE PETETION OF THE SHARES SO AS DECREASE THEM
Answered by
4
The company should Repurchase shares if it wants to reduce the number of shares outstanding.
Explanation:
- Many Companies generally repurchase shares to offset new ones which are created under employee stock option plans.
- The buyback of shares minimises the number of shares in the market and thus causes a downfall in the supply.
- Buybacks and dividends both are used to return capital to shareholders, with significantly different tax implications.
- This suddenly increases in the prices of the shares gives a false illusion to the investors.
- A sudden increase in price also increases some fundamental ratios such as EPS, ROE, etc.
- Hence, the correct answer among all the options is Repurchase shares.
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