Consider the following statements with reference to Share Buyback 1 An individual share holder resal...........

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Consider the following statements with reference to Share Buyback:

1.An individual share holder resale its share to another person to gain profit.

2.Benefit of this is that in certain situations it increases share prices of the company.

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

2 only

An individual shareholder resells its share to another person to gain profit: This statement is not accurate. Share buyback involves a company repurchasing its own shares from existing shareholders, not individual shareholders reselling their shares to others.

The benefit of this is that in certain situations, it increases share prices of the company: This statement is correct. Share buybacks can potentially lead to an increase in the company's share price due to a reduction in the number of outstanding shares, which may improve earnings per share.

Therefore, the correct option is 2: 2 only.