Which of the Following Is a Major Problem of ESOPs

question 49

Multiple Choice

Which of the following is a major problem of ESOPs?

• A) Employees may become demotivated and frustrated if the share price falls, even though they have worked productively.
• B) ESOPs place employees' pensions at risk because they are tied to the market performance of the organization.
• C) Because of the cash involved, ESOPs can be damaging to the financial well-being of the organization.
• D) Employees view the ESOP as a form of management control.

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Definitions:

Fraudulent Misrepresentation

The act of deceiving another party through false statements or misrepresentations with the intent to gain unlawfully or induce the party into a contract.

Disparagement

The act of speaking about someone in a negative or belittling way, especially to damage their reputation.

Strictly Liable

Refers to a legal principle where a party is held responsible for damages or injuries regardless of fault or negligence.

Assumption Of Risk

A legal doctrine that holds that an individual can be barred from recovering damages for any harm suffered if they voluntarily exposed themselves to a known risk.