One of the reasons for acquiring treasury stock is to avoid a hostile takeover by an outside party.

Question

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When a company acquires its own stock or treasury stock, it reduces the number of outstanding shares in the market, decreasing the likelihood of a hostile takeover by an outside party. The company can use its cash reserves to acquire these shares rather than investing in new opportunities or paying dividends to shareholders.

One of the Reasons for Acquiring Treasury Stock Is to Avoid