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Which of the following is true of treasury shares?

A) They cannot be issued by the corporation.
B) They cannot be voted by the corporation.
C) They are owned by shareholders.
D) They are entitled to receive dividends.

User MarzSocks
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1 Answer

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Final answer:

Treasury shares cannot be voted by the corporation and do not entitle the holder to dividends since they are repurchased shares held by the corporation itself.

Step-by-step explanation:

The accurate response to the question regarding treasury shares is indeed option B) "They cannot be voted by the corporation." Treasury shares, which are repurchased by a corporation and held in its own treasury, lack voting rights. These shares were originally part of the outstanding shares but were bought back, making them distinct from shares owned by external shareholders.

Treasury shares do not participate in voting on corporate matters, and they are also not entitled to receive dividends. This is because they are considered as part of the corporation's equity but not as equity held by external shareholders. Therefore, option B correctly highlights a key characteristic of treasury shares, emphasizing their non-participation in corporate voting processes.

User Spearson
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