Asked by alexandrra jaranilla on Jun 20, 2024
Verified
One reason that companies issue stock options is to attempt to align employees' interests with the interests of the owners.
Stock Options
Financial instruments that give the holder the right, but not the obligation, to buy or sell a stock at a predetermined price within a specific time frame.
Owners' Interests
The equity interest held by shareholders in a corporation, reflecting their claim on the company's assets and earnings.
- Comprehend the application of stock options as a form of remuneration and their role in synchronizing the objectives of employees with those of the company's owners.
Verified Answer
TI
Tahmid IslamJun 20, 2024
Final Answer :
True
Explanation :
This is a common reason for companies to offer stock options to employees. By giving employees an ownership stake in the company, they may be motivated to work towards the company's success and increase profitability, which benefits both the owners and the employees.
Learning Objectives
- Comprehend the application of stock options as a form of remuneration and their role in synchronizing the objectives of employees with those of the company's owners.
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