Question

Treasury stock represents stock that: a. is being held to purchase treasury securities. b. is being held to purchase preferred stock. c. a firm has sold to the U.S. Treasury Department. d. a firm has purchased back from investor

Answer 1

Answer:

The correct answer is (D)

Explanation:

Sometimes firms and organisations try to reduce the outstanding stocks in the market. To do so, they purchase back some of those stocks from the open market, such stocks are known as treasury stocks.  After that, It is up to the issuer, they can resell it to the public or they can dissolve them completely.  After purchasing back, these stocks are no longer considered outstanding.