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Hello,
Can you please explain to me:
Proposal 1: buy back equity shares at their current s.price which would be cancelled after they have been repurchased.
Is it share buy back?
In the answer sheet: impact on equity holders it says selling large quantities of equit shares… .Thank you
It is a share buy back.
What the answer is saying is that it does mean that shareholders can effectively sell their shares (back to the company) at the current market value.
If they were wanting anyway to sell their shares, then if there was no share buy back then they would have to sell them in the normal way on the stock exchange. If many people were doing this then the share price would likely fall as a result and they would receive less. Having the share buy back means they can effectively sell their shares without the share price falling.
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