Which of the Following Is Not True About an ESOP

question 45

Multiple Choice

Which of the following is not true about an ESOP?

• A)An ESOP will reduce the amount of voting stock in the hands of employees.
• B)An ESOP must be a permanent trusted plan for the exclusive benefit of the employees.
• C)The plan participants become eligible for favorable taxation of distributions from the plan.
• D)Commercial lending institutions,insurance companies,and mutual funds are permitted an exclusion from income for 50% of the interest received on loans used to finance an ESOP's acquisition of company stock.
• E)An ESOP may reduce the potential of an unfriendly takeover.