Do stock splits increase the number of shares of treasury stock a corporation holds?
I am doing some homework in my Intermediate Accounting class and have a problem related to stock splits that also involves treasury stock. Despite searching the textbook and online, I cannot find information on whether or not stock splits affect the number of shares of treasury stock.
I am thinking it doesn’t increase the number of shares of TS since they are not outstanding, but I figured I’d see if anyone with more knowledge can verify this.
It depends on the type of stock splitting that you are working with. Forward or reverse splitting? With forward splitting the number of shares increase, while the price decreases. If the shares aren’t outstanding then it wouldn’t matter. Outstanding shares= shares issued-treasury stock. Won’t affect it.