Treasury stock is capital stock which can be either common stock or preferred stocks that has been issued and reacquired by the issuing company but not been sold in the market or retired.
WHY A COMPANY PURCHASE ITS OWN STOCKS???
There are several reasons behind the own stock purchase. Some of them are given below:
- Distribute stocks to the emplyees.
- Maintain favorable market for the company's stock.
- Increase the company's EPS.
- Purchase companies through shares.
- To prevent hostile takeover.
