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Technique to pay cash to firm's shareholders that provides more preferential tax treatment for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. A repurchase is achieved through either a Dutch auction, open market, purchase, or tender offer.

Copyright © 2005, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.

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Repurchase of stock

repurchase

shareholders

preferential

tax treatment

dividends

Treasury stock

previously issued

Dutch auction

open market

purchase offer

tender offer