Which stock represents previously issued, outstanding shares that a company repurchased from shareholders?

Which stock represents previously issued, outstanding shares that a company repurchased from shareholders?

• A. Treasury Stock
• B. Issued Stock
• C. Authorized Stock
• D. Outstanding Stock

Answer: (A)

When a company buys back its own shares, those shares are moved into treasury and are no longer in the hands of investors. Treasury stock represents previously issued shares that were outstanding but have been repurchased by the company and are now held in the company’s treasury. They don’t have voting rights or receive dividends while in treasury and are shown as a reduction of equity. Issued stock refers to all shares the company has ever issued, regardless of whether they’re still out in the market or have been bought back. Authorized stock is the maximum number of shares the company is allowed to issue as set in its charter. Outstanding stock means shares currently held by investors, not the company, so repurchased shares are not outstanding. Therefore, the correct term for shares repurchased by the company is treasury stock.

When a company buys back its own shares, those shares are moved into treasury and are no longer in the hands of investors. Treasury stock represents previously issued shares that were outstanding but have been repurchased by the company and are now held in the company’s treasury. They don’t have voting rights or receive dividends while in treasury and are shown as a reduction of equity.

Issued stock refers to all shares the company has ever issued, regardless of whether they’re still out in the market or have been bought back. Authorized stock is the maximum number of shares the company is allowed to issue as set in its charter. Outstanding stock means shares currently held by investors, not the company, so repurchased shares are not outstanding. Therefore, the correct term for shares repurchased by the company is treasury stock.