TREASURY STOCK Meaning and
Definition
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Treasury stock refers to the shares of a company's own stock that it has repurchased or held in its own treasury. These shares were once issued and outstanding but have subsequently been repurchased by the company. Consequently, treasury stock is no longer considered as outstanding stock and is not eligible for voting rights or dividends.
The purpose behind repurchasing treasury stock can vary. Some companies engage in this activity to reduce the number of outstanding shares, thereby increasing the proportionate ownership of existing shareholders and boosting earnings per share. Additionally, it can serve as a way for the company to have shares available for distribution to employees through stock-based compensation plans.
These treasury shares are recorded as a contra-equity account in the company's financial statements. Typically, they are listed under stockholders' equity in the balance sheet. The cost of the treasury stock is reported as a reduction in total shareholders' equity, thereby decreasing the company's overall net worth.
While treasury stock conveys no voting rights and does not receive dividends, it retains a distinct market value as it can be reissued or resold in the future. The company may choose to sell these shares to raise capital through secondary offerings, use them for acquisitions, or retire them permanently to further reduce the number of outstanding shares.
Overall, treasury stock represents a financial instrument that companies repurchase and hold for various strategic reasons, contributing to the complexities of corporate finance and capital structure management.
Common Misspellings for TREASURY STOCK
- rreasury stock
- freasury stock
- greasury stock
- yreasury stock
- 6reasury stock
- 5reasury stock
- teeasury stock
- tdeasury stock
- tfeasury stock
- tteasury stock
- t5easury stock
- t4easury stock
- trwasury stock
- trsasury stock
- trdasury stock
- trrasury stock
- tr4asury stock
- tr3asury stock
- trezsury stock
Etymology of TREASURY STOCK
The term "treasury stock" comes from a combination of the words "treasury" and "stock".
The word "treasury" has its roots in Middle English and Old French, deriving from the Latin word "thesauraria", which means "place for storing treasure". It was used to refer to the place or institution responsible for managing and storing wealth, such as a treasury department in a government or an organization responsible for financial matters.
The word "stock" has a separate etymology, originating from Old English "stoc", which referred to a trunk or main stem of a tree. Over time, it evolved to represent a shared ownership or investment interest in a company.
When combined, "treasury stock" refers to stocks that a company has issued and later repurchased and held in its own treasury. It represents shares that are no longer held by shareholders but are instead kept in reserve by the company itself.
Similar spelling words for TREASURY STOCK
- treasure house,
- treasurer's check,
- treasury shares,
- treasury bill,
- treasury note,
- tree surgery,
- treasury bond,
- treasure ship,
- treasure hunt,
- treasure trove,
- treasure state,
- treasure chest.
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