What is stock that has been issued but later reacquired by the issuing corporation called?

What is stock that has been issued but later reacquired by the issuing corporation called?

• A. Treasury Stock
• B. Preferred Stock
• C. Authorized Stock
• D. Issued and Outstanding Stock

Answer: (A)

The term for stock that has been issued but later reacquired by the issuing corporation is known as treasury stock. This stock represents shares that were once a part of the outstanding shares and then bought back by the corporation. When a company repurchases its own shares, those shares are removed from the market circulation but are retained in the company's treasury and can be reissued or sold in the future. Treasury stock does not have voting rights or pay dividends, and it is often used for various strategic purposes, including increasing earnings per share, using shares for employee compensation plans, or enhancing shareholder value. Understanding the classification and implications of treasury stock is crucial for analyzing a company's financial position and strategies. The other options in the question refer to different categories of stock that do not describe shares reacquired by the issuing corporation.

The term for stock that has been issued but later reacquired by the issuing corporation is known as treasury stock. This stock represents shares that were once a part of the outstanding shares and then bought back by the corporation. When a company repurchases its own shares, those shares are removed from the market circulation but are retained in the company's treasury and can be reissued or sold in the future.

Treasury stock does not have voting rights or pay dividends, and it is often used for various strategic purposes, including increasing earnings per share, using shares for employee compensation plans, or enhancing shareholder value. Understanding the classification and implications of treasury stock is crucial for analyzing a company's financial position and strategies. The other options in the question refer to different categories of stock that do not describe shares reacquired by the issuing corporation.