July Limited (the "Company") is a company listed on the Stock Exchange of Hong Kong limited. Its issued share capital is HK$30 billion.

The Company held an annual general meeting ("AGM") on 20 July 2020. At the AGM, a resolution was passed to grant a general mandate to the directors to buy back the Company's shares by not more than 10% of the issued shares of the Company as at the AGM date, until the conclusion of next AGM.

The Company's share price has been dropped below the reasonable price range per share. The board of directors is considering ways to protect the interests of the shareholders by subdividing every one share into five shares as well as shares buy-back. The Company shall buy back its shares off-market.

Required:

1. (a) Explain how the subdivision of shares could stablise the share price of the Company and how to prevent the creation of low-priced shares through the subdivision of shares? (5 marks)
2. (b) Explain how shares buy-back can stablise the share price of the Company?