Asked by steven remmenga on Jun 09, 2024
Verified
Which statement is true of using stock options as incentive pay?
A) The use of stock options ensures that managers add value in terms of efficiency and customer satisfaction.
B) Stock options require an option holder to purchase the organization's stocks at its present market rate.
C) Stock options are rewarding for employees who exercise their option when the company's stock value has risen.
D) Low-level employees with stock options are more likely to think like owners than executives who have stock options.
E) A company's performance in the stock market tends to be significantly better if its low-level employees are provided stock options.
Stock Options
Financial instruments that give employees the right to buy shares of their company's stock at a predetermined price.
Option Holder
An individual or entity that possesses the rights, but not the obligation, to buy or sell a specified amount of an underlying asset at a fixed price within a certain time frame.
Stock Value
The price of an individual share of a company's stock, reflecting the market's assessment of its worth.
- Acquire knowledge about the limitations of diverse incentive remuneration methods, including equity participation.
Verified Answer
Learning Objectives
- Acquire knowledge about the limitations of diverse incentive remuneration methods, including equity participation.
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