Treasury shares arise when a corporation reacquires its own previously issued common shares. A reason for reacquiring outstanding common stock is to use the treasury shares in various option arrangements. When holders of stock options, stock rights, stock warrants, and convertible securities exercise their options, firms usually receive
a. less cash (or market value of other consideration) than the market value of the common stock at the time.
b. a current liability on the books of the reacquiring corporation.
c. more cash (or market value of other consideration) than the market value of the common stock at the time.
d. a long-term liability on the books of the reacquiring corporation.
e. a long-term asset on the books of the reacquiring corporation.
A
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