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What is Treasury Stock:

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A) Shares issued only to employees as bonus
B) Government-owned shares in a company
C) Shares of a company repurchased and held by the company itself
D) Shares issued to public and permanently outstanding

Correct Answer: C) Shares of a company repurchased and held by the company itself

• Treasury Stock is strictly defined as Shares of a company repurchased and held by the company itself. • Unlike regular outstanding common shares, treasury stock does not receive any Dividends. • Furthermore, repurchased treasury stock carries absolutely no corporate Voting rights. • Companies frequently repurchase their own shares to artificially boost their Earnings Per Share (EPS). • Treasury stock is always recorded on the balance sheet as a Contra-equity account.

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