NISM Certifications · NISM-Series-XV: Research Analyst · Corporate Actions
A company with 20 crore shares announces a buyback of 2 crore shares at Rs 250 per share through the tender offer route. What is the total buyback outlay?
The total buyback outlay is Rs 500 crore, found by multiplying the 2 crore shares being repurchased by the Rs 250 buyback price. The 20 crore total shares figure is irrelevant to the cost and only shows the proportion bought back.
- ARs 50 crore
- BRs 500 croreCorrect
- CRs 5,000 crore
- DRs 250 crore
Explanation
Outlay = number of shares x price = 2 crore x Rs 250 = Rs 500 crore. Rs 50 crore misplaces a decimal. Rs 5,000 crore multiplies by 20 crore shares instead, using the wrong base.
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