What is a likely outcome of a firm successfully managing its treasury stock?

Successfully managing treasury stock can lead to higher chances of accessing additional capital because it reflects a firm’s strategic financial management. When a company buys back its own shares, reducing the number of shares available in the market, it can signal confidence in its own stability and future growth prospects. This action often leads to a higher share price, as demand for the remaining shares increases and supply declines.

As a result, investors may perceive the company as a more attractive investment opportunity, which in turn can enhance its ability to raise capital when needed. This can be achieved through future equity offerings at favorable prices, or by borrowing against the stronger share price, which may reduce the perceived risk by lenders due to improved financial metrics.

In contrast, options dealing with lower employee morale, increased difficulty in stock liquidation, and decreased operational efficiency do not directly correlate with successful treasury stock management. If anything, reduced share availability might create a more stable stock price, positively affecting employee morale through stock options and other equity-based incentives.