Final answer:
Companies buy back treasury stock at the current market price, not the original selling price. This practice can affect the market, share value, and company's balance sheet.
Step-by-step explanation:
The statement that companies buy back treasury stock at the price they were originally sold for is false. When a company repurchases its own shares, it does so at current market prices, which can differ from the initial selling price. The repurchase of treasury stock can happen for various reasons, such as to reduce the number of shares on the market, increase the value of remaining shares, or to have shares available for employee compensation plans.
Share repurchases go through the open market or via private transactions, and thus, the prices can fluctuate based on market conditions. It's worth noting that once a company re-acquires shares, these do not convey voting rights and are considered as 'treasury stock' within the company's balance sheet.