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Why is it that the company has a deduction on paid-in capital stock?

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Why is it that the company has a deduction on paid-in capital stock?

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  1. Many companies repurchase shares (as Treasury Stock) in order to offset the dilutive effects of exercised stock options which increase the number of outstanding shares. This repurchase results in a cash outflow, and has been used by those arguing for the expensing of employee stock options as evidence of the cash effect of these options and linkage to the payment of wages.

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