Question

This is a two part question: - On which financial statement will you find the precise...

This is a two part question:

- On which financial statement will you find the precise amount a company spent on share repurchases in the previous period?

- Why are share repurchases considered a "return of capital" to shareholders?

Homework Answers

Answer #1

1. Buyback are to be considered while maintenance of statement of cash flows and which will also reflect at balance sheet as the equity will go lower, and it will be simultaneously adjusted with cash balance.

2. Share repurchases are return of capital to shareholders because it is a form of buying back the existing shares of shareholders at a price which is higher than the prevalent price in the market and hence it would lead to Capital gains in the hands of shareholders so it can be considered as a return to shareholders.

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