Asked by Rajbeer Sandhu on Jul 27, 2024

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Employee stock ownership plans (ESOPs)are potential sources of funding used by existing companies that have low to moderate confidence in the stability of their future earnings and cash flow.

Employee Stock Ownership Plans (ESOPs)

An employee benefit plan giving workers ownership interest in the company, often aimed at improving company performance and employee satisfaction.

Funding Sources

Various origins of financial support for businesses or projects, including loans, investments, grants, and personal savings.

Future Earnings

Projected profits or income of a business or investment, anticipated in future periods based on past and current trends.

  • Distinguish between the attributes and incentives of diverse groups of investors such as angel investors, venture capitalists, and mezzanine investors.
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Verified Answer

AP
Anthony PreziosioJul 30, 2024
Final Answer :
False
Explanation :
ESOPs are not primarily used as sources of funding; they are designed to provide employees with ownership interests in the company, often to align employees' interests with those of the company's owners and potentially as a strategy for succession planning. Funding typically comes from other sources.