Question

Stock buy back program that create treasury stocks would be benefit to minority shareholders. -Always true -Not true -True with specific assumption -Not true presently, but would be -true within 3 years -Inconclusive

explain

Answer 1

Treasury stock is stock repurchased by the issuer and intended for retirement or resale to the public. these shares can be sold as and when the fund needs to the company. these shares may be created for raising the funds. Often treasury shares have voting rights and such shares are used by the promoters to exercise control over the company in an indirect way

1. Always Ture- the above given statement is not correct as the Treasury shares may be created with the intention to hold the power of Control over the Company or Organasation as these shares are held by the Promoters

2. Not true- This statement is also not correct as the shares may create benefit to the minority shareholders when they have given the Right to Vote in the Company or Organisation

3.True with specific assumption- This statement is Correct when the minority shareholders have given the Voting Right agnaist the these shares. Assuming that the minority shareholder have given the Voting Right.

4.Not true presently, but would be -true within 3 years- Time period does not change the charactristic/Feature of Treasury Shares, the above statemen is not Correct/True