Which One of the Following Statements Regarding Employee Stock Options

question 27

Multiple Choice

Which one of the following statements regarding employee stock options (ESOs) is correct?

• A) ESOs grant an employee the right to buy a fixed number of shares of company stock at the market price.
• B) Employees must exercise their ESOs prior to those ESOs becoming vested.
• C) Employees may forfeit their ESOs if they terminate their employment with the issuing firm.
• D) If a firm issues ESOs it must make them available to all employees.
• E) Employees can sell their ESOs if they do not want to personally exercise them.

---

Definitions:

Bank Statements

Financial statements issued by a bank detailing the transactions in a depositor's account over a certain period.

Chart of Accounts

A listing of all the accounts in a business's general ledger, which includes assets, liabilities, revenue, expenses, and equity.

Identification Numbers

Unique numerical codes assigned to entities for identification purposes, such as Social Security numbers for individuals or EINs for businesses in the U.S.

General Journal

A general journal is a basic accounting record used to document all financial transactions of a business in chronological order, prior to their transfer to specific accounts in the general ledger.