Treasury stock


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Treasury stock

Common stock that has been repurchased by the company and held in the company's treasury.

Treasury Shares

Stock that a publicly-traded company issues but does not place with investors, or which it has bought back from shareholders. That is, the company holds its treasury shares back until such time as selling them becomes beneficial. Treasury shares have been issued, but they are not considered shares outstanding. Selling treasury shares to the public can be a less expensive way for the company to raise capital because the amount it spent issuing them previously is a sunk cost. Treasury shares are not included in "per share" calculations.

treasury stock

The shares of a firm's stock that have been issued and then repurchased. Treasury stock is not considered in paying dividends, voting, or calculating earnings per share. It may be retired or reissued. See also retirement.

Treasury stock.

Treasury stock is stock that an issuing company repurchases from its shareholders.

The company may choose to repurchase if it has cash available, as an alternative to investing it in expanding the business. Or it may issue bonds to raise the money it needs to repurchase, which changes the company's debt-to-equity ratio.

In most cases, the company offers to pay a premium, or more than the market price, to build its cache of Treasury stock.

Reducing the number of outstanding shares boosts the per-share value of the remaining shares and tends to increase the market price of the stock. That results, in part, because no dividends are paid on Treasury stock and it's not included in earnings-per-share calculations, boosting that ratio.

A company may buy back its stock for a number of other reasons, ranging from preventing a hostile takeover to having shares available if employees exercise their stock options.

It may also choose to resell the shares or use them to meet the demand for shares from holders of convertible securities.

References in periodicals archive ?
The other companies saddled with treasury stocks are Mahindra & Mahindra, BPCL, IOC and United Spirits.
The second new method replaces the treasury stock method when calculating the effect of a stock rights issue.
If it is sold for more or less than acquisition cost, the difference is debited or credited to contributed capital from treasury stock transactions.
Treasury Stock 14/05/2012 Treasury Stock 14/05/2012
Unlike other industrial countries, where companies are allowed to buy and hold their own shares as treasury stock, Japanese firms are allowed to do so only under certain conditions -- usually to feed stock option schemes or to cancel shares.
10/1 Sold 300 of the remaining treasury stock for $8 per share.
Komura said treasury stock should be addressed as a structural reform issue, and not as a quick-fix for stock prices.
Mori's remarks in a telephone conversation with Shizuka Kamei, chairman of the LDP's Policy Research Council, came after Justice Minister Masahiko Komura reiterated his opposition earlier in the day to the government taking hasty action on lifting a legal ban on treasury stock.
But Justice Minister Masahiko Komura, former head of the Economic Planning Agency, expressed a qualified willingness to remove a legal limit on the use of treasury stock to reversing the plunging stock market.
McCay, chairman of the board, president and chief executive officer of Jefferson Savings Bancorp explained that by issuing shares of treasury stock upon the exercise of stock options granted under the company's 1993 stock option and incentive plan, the company hopes to avoid future dilution of stockholders' value.
A senior policy-maker of the ruling Liberal Democratic Party (LDP) on Thursday requested business leaders to make suggestions on policies regarding its plan to lift legal restrictions on treasury stock.
14 /PRNewswire/ -- The Executive Committee of the Board of Directors of First Empire State Corporation ("First Empire") (AMEX: FES) today authorized First Empire to purchase and hold as treasury stock up to 506,930 additional shares of its common stock, or approximately 7.