What are 'treasury shares'?

Answer options:

Shares issued directly to the government.

Shares that a company has bought back from shareholders and holds in its own name.

Shares that carry no voting rights but guarantee a fixed dividend.

Shares held by the directors of the company.

How to approach this question

Define the term 'treasury shares' in corporate finance.

Full Answer

B.Shares that a company has bought back from shareholders and holds in its own name.✓ Correct

Treasury shares are shares that a company has purchased out of distributable profits and holds 'in treasury' rather than cancelling them. They can be re-sold later.

Common mistakes

Assuming they are related to the national Treasury.

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 1

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What are 'treasury shares'?

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Full Answer

Common mistakes

Practice the full ACCA LW — Corporate and Business Law Practice Exam 1

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