Question

Treasury stock is A. stock purchased by a corporation and held as an investment in its treasury. B. stock issued by the U.S. Treasury Department. C. corporate stock issued by the treasurer of a company. D. a corporation's own stock which has been reacquired but not retired.

Answer 1

Answer:

The correct answer to the following question is option D) a corporations own stock which has been reacquired from stockholders and are not yet retired.

Explanation:

Treasury stocks can be defined as those outstanding stocks which a issuing company has reacquired or repurchased from the stockholders and now company has kept these stocks in their treasury. These repurchased stocks are now no more outstanding shares but they are also not retired because they are held by company in their treasury. While calculating the EPS ( which is earning per share ) , these stocks would not be included, and the effect of the repurchasing of repurchasing on balance sheet would be that the shareholders equity would be reduced ( amount would be equal to the money paid to repurchase the stock ) .