All of the Following Is True About Phantom Stocks Except

question 1

Multiple Choice

All of the following is true about phantom stocks except:

• A)They are expensed over the vesting period
• B)They give employees the right to own equity
• C)The company needs cash when phantom stocks are exercised
• D)They grant the holders additional voting power
• E)They lower the dilution effect

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Definitions:

Amortized

The process of spreading out a loan into a series of fixed payments over time, covering both principal and interest.

Outstanding Principal

The portion of a loan amount that has not yet been repaid to the lender.

Principal Repayment

The process of paying back the original amount of money borrowed, excluding interest, in a loan or bond.

Fixed-Rate Mortgage

A mortgage loan that has a fixed interest rate for the entire term of the loan, protecting borrowers from rising interest rates.