Problems with Stock Options Include All EXCEPT

question 11

Multiple Choice

Problems with stock options include all EXCEPT:

• A)A CEO might forego increasing dividends to use the cash to try and increase the stock price.
• B)CEOs accept riskier projects because that usually causes the stock price to increase.
• C)Option payoffs are closely related to the performance of the overall stock market.
• D)CEOs will work hard to increase the stock price when they receive stock options.
• E)There are no problems with using stock options to incent CEOs.

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Definitions:

Projection

A defense mechanism where individuals attribute their own unwanted thoughts, feelings, or motives to another person.

Quarrelsome

Quarrelsome describes a person prone to arguments or disputes, often engaging in hostile exchanges.

Psychoanalytic Theory

is a method of psychology and psychotherapy developed by Sigmund Freud that emphasizes unconscious motives and conflicts.

Inferiority Complex

A psychological condition where an individual feels a deep sense of inadequacy and inferiority, often leading to overcompensation or withdrawal.