Treasury stock results from the

Question

Quizplus · Accepted Answer

Treasury stock is created when a company repurchases its own outstanding stock from shareholders. This results in a reduction in the number of outstanding shares, which can potentially increase earnings per share and improve the stock price. Option A is incorrect because selling stock for greater than its par value does not result in treasury stock. Option B is incorrect because the cumulative feature on preferred stock does not lead to the creation of treasury stock. Option D is incorrect because the authorization of additional shares of stock does not create treasury stock - it simply enables the company to issue more shares in the future if needed.

Treasury Stock Results from the