Finance: What is treasury stock?

What is treasury stock? When it registers to become corporation, a company is required to list the number of shares it is authorized to issue in accordance with its corporate charter. The outstanding shares are those that are issued to investors, officers, and owners of restricted or convertible securities with common stock ratios. The remainder of common stock not distributed that remains with the company is treasury stock. This can also include stock that the company buys back for its own account in the open market.

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Transcript

00:21

the time in part because well it's a different and

00:23

more tax efficient way to return to shareholders Quote excess

00:26

cash unquote as if there ever really is excess cash

00:30

like there's always another jet you could write when dividends

00:33

are paid well their tax the second time on the

00:35

backs of the individuals receiving those cash dividends But when

00:39

cash is used to shrink the shares outstanding while in

00:42

theory anyway it charges or strangles or pushes up the

00:47

stock price per share anyway So in buying back shares

00:50

the company stores them as an asset And those shares

00:53

were carefully tracked because well who knows The company might

00:56

sell shares someday and then the treasury Stockwell in theory

01:00

gets sold back to investors presumably at a much higher

01:02

price than which those shares were bought So treasury stock

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is really just a kind of placeholder It doesn't vote

01:08

it doesn't pay dividends or receive dividends Like why would

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the company pay dividends to itself just to be act

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It just sits there Ah result Oven over fed market 00:01:17.069 --> [endTime] like this guy