Which of the Following Statements Is True in the Context

question 19

Multiple Choice

Which of the following statements is true in the context of stock-based compensation?

• A) Stock options usually result in information asymmetry.
• B) Stock-based compensation schemes for executives can align management and stockholder interests.
• C) A cause for concern is that stock options are often granted at extremely high strike prices.
• D) Critics deny that stock-based compensations motivate managers to improve company performance.
• E) Granting more stock options often results in an increase in stockholder equity.

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Definitions:

Tangible Assets

Physical and material assets that have intrinsic value, such as machinery, buildings, and inventory.

Intangible Assets

Non-physical assets that have value, such as patents, trademarks, copyright, and goodwill.

Sales Potential

An estimate of the maximum total revenue a product or service can generate under ideal conditions.

Business Owners

Individuals who legally possess a company or business, bearing the risks and enjoying the benefits of the entity's operations.