Definition of Treasury Stock

Treasury stock is stock that has been issued by a corporation and which has subsequently been repurchased by the corporation. Treasury stock does not vote, receive dividends, nor is it used in the calculation of earnings per share

Applying "Treasury Stock" to Securities Exams:

Companies may wish to repurchase their own shares to fund an employee stock purchase plan or to regain control of the company. A company may want to reduce the number of shares outstanding to protect itself from a hostel take over. Shares that have been repurchased by the company reduce the number of shares outstanding but do not reduce the number of shares that have been issued.

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