In what condition might a company prefer to use its treasury shares?

A company might prefer to use its treasury shares when the market price is low and the goal is to return cash to shareholders. Treasury shares, which are shares that were previously issued but are now held by the company itself, offer a unique opportunity in such situations. When the market price is low, using treasury shares can prevent the company from needing to issue new shares, thereby avoiding further diluting existing shareholders' ownership. By repurchasing shares at a low market price, a company can effectively return value to its shareholders while optimizing its financial strategy.

This approach allows the company to utilize its own stock as a form of cash return, which can be beneficial in a challenging market. Utilizing treasury shares in this manner can help maintain shareholder confidence and provide a more favorable perception of the company's financial health, even during downturns. Furthermore, it can enhance earnings per share by reducing the number of shares outstanding.

In contrast, other scenarios might not align as neatly with the concept of using treasury shares. For instance, maximizing benefits when market price is high often leads to selling treasury shares, not using them. Reducing expenses without affecting operations does not directly correlate with using treasury shares, since issuing new shares is a more common method in that context. Lastly, issuing new