Stock cancellation - Kabushiki Shokyaku

Japanese: 株式消却 - かぶしきしょうきゃく

When a corporation acquires its own stock and cancels it. It buys its own stock from the stock market and removes it from the number of shares issued. Cancelled stocks literally become stocks without substance, and do not require dividends or accrue the rights that shareholders who hold them are given. Not only does a reduction in the number of shares issued increase earnings per share, which is important in stock investment, but a reduction in the number of shares supplied to the market also leads to higher stock prices. However, there are restrictions on the funds that can be used to cancel stocks, and they are limited to surplus funds that do not put a strain on the company's management, such as profit reserves and capital reserves that can be used to pay dividends to shareholders, and unrealized gains from the difference between the book value and market value of owned land.

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Japanese:

株式会社が自社の株式を取得して、これを消却すること。株式市場から自社株を買い、発行済み株式数から取り除くこと。株式消却された株式は、文字どおり実体のない株で、配当の必要もなく、保有する株主に与えられている権利なども生じない。株式投資で重視される1株利益が、発行株数の減少で高まるほか、市場に供給される株式が減ることで株高要因になる。もっとも、株式消却を行なうには充てられる資金についての制限があり、株主配当ができる利益準備金や資本準備金、所有土地の簿価と時価による差の含み益など、会社の経営を圧迫しない余裕資金に限られる。

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