The 2011 annual report for Philip Morris Companies, Inc., disclosed that 4 billi

Question

The 2011 annual report for Philip Morris Companies, Inc., disclosed that 4 billion shares of common stock have been authorized. At the end of 2010, a total of 2,818,561,317 shares had been issued and the number of shares in treasury stock was 379,674,028. During the current year, no additional shares were issued, but additional shares were purchased for treasury stock and shares were sold from treasury stock. The net change was an increase of 5,217,286 shares of treasury stock. Determine the number of shares outstanding at the end of the current year. (Amounts to be deducted should be indicated by a minus sign.)

Explanation / Answer

The portion of shares that a company keeps in their own treasury. Treasury stock may have come from a repurchase or buyback from shareholders; or it may have never been issued to the public in the first place. These shares don't pay dividends, have no voting rights, and should not be included in shares outstanding calculations.

Shares outstanding                   2,818,561,317 Less increase in treasury stock                           5,217,286 Shares outstanding                   2,813,344,031

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