Series 79: Treasury Stock Method

Taken from our FINRA Investment Banking Exam

Definition of the term Treasury Stock Method...

how fully diluted shares outstanding is calculated. To actual shares outstanding is added the number of new shares that would be outstanding if the issuer immediately had to honor all in-the-money options, warrants, and convertible securities that it has issued on its common stock. From this is subtracted the number of shares the issuer could repurchase with the proceeds from those executed options, warrants, and convertible securities.

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