When a company procures its own outstanding shares i.e. quantum of stock in the open market along with shares held by institutional investors and restricted shares held by insiders and company officers, to reduce the number of shares available for General Public.
Reasons for buy back
Buy back of shares is undertaken for numerous reasons, like to strengthen the value of remaining shares available by cutting the supply or preventing other stakeholders from taking a controlling share. Few reasons for companies buying back their shares are discussed as follows:
- Preserving stock price: Company operates with the intention of
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Investment required to start a business
“The Entrepreneur always searches for change, responds to it and exploits it as an opportunity!”
Quoted above is not only a saying but a true exhibit of how a man aspiring to establish his own business should retaliate to the dynamic environment we live in. As risk and reward go hand-in-hand, it is crucial for an entrepreneur to estimate the cost involved and income generated for any new business, whether you’re a fast moving start up or still weighing the pros and cons of whether or not to set up a new venture.
Though, … Read more
What is Income Tax?
A tax imposed on taxable income or profits of persons (whether individual, firm, company, Artificial Juridical Person, Association of Persons, Body of Individuals or Local Authority). Taxation rates may vary by type or characteristics of tax payers.
Tax trend followed in India:
In India, two types of tax trends are followed:
- Progressive Rates: When the tax rate increases as the taxable income increases.
- Proportional Rates: When the tax rates are uniform, irrespective of the person or their incomes.
Income tax in itself is a vast concept and cannot be understood in entirety by a layman, so … Read more
Non Resident Indians (“NRI”) are often faced with the situation of maintaining an Indian rupee account. Primarily, there can be two reasons for opening such account: NRI wants to repatriate overseas earned money and / or NRI wants to keep India based earnings in India such as rent, dividend income, etc. There are two options available with NRI interested in opening bank account in India – Non Resident Rupee Account (“NRE”) or Non Resident Ordinary Rupee account (“NRO”).
Similarities between NRE and NRO accounts:
Both accounts can be opened as savings, fixed or recurring deposit account, current accounts. One needs … Read more
What is value of currency for an economy?
An economy is often represented by the people who live there and the value its currency has, further the value of a currency depends on factors that affect the economy like imports and exports, performance of equity markets, foreign exchange reserves, macroeconomic policies, inflation, employment, interest rates, growth rate, trade deficit, foreign investment inflows, banking capital, commodity prices and geopolitical conditions. Currencies are often influenced by income levels through consumer splurge. When income increases, people tend to expend more. Demand for imported goods increases demand for foreign currencies, thus, weakening the local … Read more
Foreign businesses often channelize their funds to reap the benefits of fast growing economy, cheap labor and wide scope of earning increased returns in India. To capture and relish such benefits, FDIs are superintended towards India in huge proportions by different countries around the world.
What is FDI?
Foreign Direct Investment (FDI) is generally termed as an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company.… Read more