Treasury Shares

Question 1

Treasury stock

Answer 1

are shares that have been issued but are not owned by investors; instead, they are owned by the company. Treasury shares may have been issued but never sold to the public.

Question 2

Corporations buy back shares from investors for several reasons.

Answer 2

1) May be used in employee benefit programs such as stock option or bonuses
2) employee stock purchase plan
3) acquire assets of another company
4) boost EPS

Question 3

Shares outstanding

Answer 3

When an issuer repurchases shares, and thus removes them from circulation, stock remaining in circulation

Shares outstanding= issued shares-treasury shares

Question 4

The number of shares outstanding is used to determine

Answer 4

Market capitalization