- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Hi
I have to ask that in many of exam questions this term is used that by raising more debt either company buy back shares or invest in non current assets
Can u please help me understand share buy back ..is it same as share repurchase !
Also how a rights issue helps as source of finance and suppose if there is a rights issue and shareholders don’t take up the rights issue what does it mean?
A share buy-back is the same as share repurchase. The company buys shares at whatever the current market value is, and then cancels them.
Rights issues are explain in full in my lectures for F3, FM, and AFM.
It is a source of finance because new shares are issued and shareholders have to pay for them. If shareholders have the right to take up the shares but decide not to, then they sell the rights.
- You must be logged in to reply to this topic.