The treasury stock method assumes that holders exercise eligible options or warrants and that the company uses the exercise proceeds to repurchase its own shares. The shares hypothetically repurchased are called treasury shares and offset part of the dilution from the newly issued shares.
How the treasury stock method works
Continue reading with a Guides subscription
Purchase Guides or Guides + Question Bank access to unlock the rest of this article.
Continue Learning
Explore more technical interviews guides or practice with the question bank.