Definition of Treasury stock:
US term for corporate stock reacquired by the issuing firm to (1) hold in its control to frustrate a takeover attempt, (2) reissue it to the public at a later date for a better price, (3) cancel (retire) it to reduce number of outstanding shares and thus increase earnings per share. When held by the issuing firm, treasury stock accrues no dividend and has no voting power. It is recorded in the issuers books at its acquisition cost (called cost method) or at its par value (called par value method). In either case, retained earnings equal to its acquisition cost are appropriated. In the issuers balance sheet, it is show as a deduction in arriving at stockholders equity, and is ignored when computing the ratios that measure value per common stock. Also called reacquired stock or (in the UK) treasury shares.
How to use Treasury stock in a sentence?
- If you want to find a way to invest your money and can handle a little risk then getting a treasury stock can work well.
- If you want to give your company a chance to grow you could try making it available as a treasury stock .
- My company was thriving in the business world and we had a great deal of treasury stock and also a myriad of other things.
Meaning of Treasury stock & Treasury stock Definition