Asked by Miranda Wilkerson on May 07, 2024
Verified
Earnings per share (EPS)is affected by treasury stock transactions.
Earnings Per Share
A financial ratio that measures the amount of a company's net income allocated to each outstanding share of common stock.
Treasury Stock
A corporation’s own stock that has been repurchased. Shares held as treasury stock are considered issued shares but not outstanding shares.
- Appreciate the impact of treasury stock transactions on financial ratios.
Verified Answer
AS
ARSHDEEP SINGHMay 09, 2024
Final Answer :
True
Explanation :
Treasury stock transactions can decrease the number of outstanding shares, which will increase the EPS. Conversely, if the company reissues the treasury stock, it can increase the number of outstanding shares and decrease the EPS. Therefore, treasury stock transactions can affect the calculation of EPS.
Learning Objectives
- Appreciate the impact of treasury stock transactions on financial ratios.
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