ExpertEasy1 markMultiple Choice
ACCA · Question 35 · Corporate and Business Law
What are 'treasury shares'?
What are 'treasury shares'?
Answer options:
A.
Shares issued directly to the government.
B.
Shares that a company has bought back from shareholders and holds in its own name.
C.
Shares that carry no voting rights but guarantee a fixed dividend.
D.
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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