You are exposed to the rationale of share buy-back schemes by public listed company. Share buy-back schemes have become increasingly popular among overseas jurisdictions in recent years. The recent development of share buy-back is basically due to increasing internationalisation of equity market, capital mobility which has been redirected into more efficient investment, takeover defence strategy of company, and self purchase of company’s share when it is undervalued. The knowledge and understanding of the rule prohibiting and permitting share buy-back gives you the knowledge to advise relevant parties into the “do” and “don’t” in the share buy back schemes.
| Self-test 3.3
|Question to self-test 3.3||Suggested answers to self-test 3.3|