Question

A company can buy-back its own shares or other specified securities by the following methods except:

• A. From the existing security holders on a proportionate basis through the tender offer
• B. From open market through book-building process or stock exchange
• C. From any person through negotiated deals on the stock exchange
• D. From odd-lot holders

Hint:

Share buybacks can occur through specific methods; negotiated deals on exchanges are not one of them.

Answer 1

The Correct Option is C

Companies can repurchase shares using various methods:
A tender offer involves the company proposing to acquire shares from existing security holders at a specified price.
Open market repurchases are executed via the stock exchange, often following a book-building process.
Repurchase programs may also specifically target odd-lot holders (small shareholders).
However, purchasing shares through negotiated deals on the stock exchange is neither a standard nor an allowed method for buybacks, as it is considered insider trading.