Which One of the Following Is an Argument Against Repricing

question 52

Multiple Choice

Which one of the following is an argument against repricing employee stock options?

• A)ESO's are originally issued with positive intrinsic value so there is no reason to reprice.
• B)Employees have more incentive when options are "under water".
• C)Repricing is a reward for failure.
• D)It is unnecessary to reprice as ESOs expire quickly.
• E)Repricing affects the market price of the firm's stock for all shareholders.

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Definitions:

Safety Inventory

Extra stock that is kept on hand to protect against variability in demand or supply and to ensure that production processes can continue smoothly.

Holding Cost

The expense associated with keeping inventory in storage, including warehousing, security, insurance, and spoilage costs.

Least Expensive

Refers to the lowest price option available.

Transportation Option

Different modes or methods of moving goods or people from one location to another, including road, rail, air, and sea transport.