Which of the following is not a reason that companies may undertake a share buy-back?
A) To manage the capital structure.
B) As a defence against a hostile takeover.
C) To efficiently manage surplus funds.
D) To increase the value per share of the remaining shares.

Question

Quizplus · Accepted Answer

A share buy-back can be used as a defense against a hostile takeover, but this is not typically cited as a reason not to undertake a share buy-back. The other options (managing the capital structure, efficiently managing surplus funds, and increasing the value per share of the remaining shares) are common reasons for a company to buy back its shares.

Which of the Following Is Not a Reason That Companies