1.

What is the treasury stock method?

Answer»

<P>The treasury stock method is a process in which the companies to calculate how many additional shares can be generated from the outstanding in-the-money warrants and the options. These NEW shares that have been added can then be used in calculating the company’s diluted earnings per share (EPS).

32. How do you calculate treasury stock? Treasury Stock Method FORMULA:Additional outstanding shares = Shares from the exercise – repurchased shares

Additional outstanding shares = N – (n x K / P)
Additional outstanding shares = n (1 – K/P)


In the formula:-


N = shares from the options or the exercised warrants
P = Average share price for the period
K = Average exercise share price

Solve some questions on this. This one of the vital banking INTERVIEW questions.


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