Asked by Schyler Molloy on Jul 07, 2024
Verified
If a company distributes stock to employees by granting stock options, employees exercise the option when they
A) purchase the stock.
B) sell the stock.
C) retain the stock.
D) distribute the stock.
E) liquidate the stock.
Stock Options
Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of a company at a specified price within a set time frame.
Granting Stock
The process by which a company offers shares of its stock to employees as part of their compensation package or as a reward.
Exercise Option
The act of implementing the right to buy or sell an asset under the terms of an option contract.
- Become familiar with the shortcomings inherent in various incentive payment schemes, like stock ownership.
Verified Answer
Learning Objectives
- Become familiar with the shortcomings inherent in various incentive payment schemes, like stock ownership.
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