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6 years ago
Define treasury stock and provide two reasons why a corporation would purchase treasury stock.
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
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6 years ago
 Treasury stock is a corporation's own stock that it has previously issued and later reacquired.  A corporation may purchase treasury stock for the following reasons:
1.Management wants to increase net assets by buying low and selling high.
2.Management wants to support the company's stock price.
3.Management wants to avoid a takeover by an outside party by reducing the number of outstanding shares that have voting rights.
4.Management wants to reward valued employees with stock.
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