CA Inter P1 · Chapter 10 · Question 6 of 10
Which of the following is NOT a permitted source for financing a buyback of equity shares under section 68?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Proceeds of an earlier issue of equity shares
Explanation
Section 68 allows a buyback out of free reserves, the securities premium account, or proceeds of the issue of any shares or other specified securities, but no buyback of any kind of shares can be made out of the proceeds of an earlier issue of the same kind of shares. Hence equity shares cannot be bought back out of proceeds of an issue of equity shares.
More Buyback of Securities MCQs
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