Which of the Following Is Not a Reason for Distributing

question 48

Multiple Choice

Which of the following is not a reason for distributing equity among employees?

• A) New companies often can't pay market rates for salary and wages
• B) Including some equity in the compensation package aligns the employee with the company
• C) The sense of ownership boosts morale
• D) Distributing equity among employees reduces the risk of hostile takeover
• E) Having some equity, the team sticks together during the rough times in the early launch phase

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Definitions:

Compounded Semi-Annually

Interest on an investment is calculated and added to the principal sum of the investment two times a year.

Effective Annual Rate

The real return on an investment after accounting for compounding interest over a year, often differing from the stated nominal rate.

Compounded Monthly

Interest calculation method where interest earned is added to the principal balance each month, affecting future interest calculations.

Rate of Return

The net profit or net loss recorded on an investment within a certain interval, articulated as a percentage of the investment's initial pricing.