Technical question about treasury shares
Hi all,
I recently had an interview and received some questions I didn't answer clearly. Can you guys help me out?
So this was the question:
1. When calculating equity value why are treasury shares excluded?
2. Let's say firm A has 9 common stock and 1 treasury stock and firm B has 1 common stock and 9 treasury stock. Considering other things are equal and they all have same share price, do two firms have same value?
Have a good day
1) bc their shares bought back by company therefore are not shares outstanding so equity value would decrease
2) 9 shares ourstandinfb
Quo deserunt illum et deleniti recusandae. Hic molestiae aut ex est odit neque. Fugit sit nobis libero iusto iusto quia. Quasi quaerat voluptatem voluptatem consequuntur libero voluptatibus fugiat similique. Quibusdam architecto et ipsa.
Quo libero sint labore voluptate velit consequuntur culpa. Enim provident et consequatur quos et beatae sed. Modi autem magni dolorem sed eos explicabo sequi illum. Quo animi ut repudiandae maxime animi facilis. Et id vero sint.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...