For Early-Stage Ventures, Which of the Following Is a Strong

question 54

Multiple Choice

For early-stage ventures, which of the following is a strong reason for having an equity component in employee compensation?

• A)the expected deferred and tax-preferred compensation allows the venture to pay a lower current compensation to employees
• B)it is a way to motivate employees to strive for a goal of low equity value
• C)any dividends received as part of the equity compensation reduces taxable income
• D)it reduces the percentage of ownership held by debtholders

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Definitions:

Area

A measure of the extent of a two-dimensional figure or shape in a plane.

Price

The amount of money required to purchase a good or service, determined by factors such as supply, demand, and production cost.

Surplus

The amount of a good that is available exceeds the quantity demanded at the current price.

Price

Price is the amount of money required to purchase a good or service, determined by factors such as supply and demand, production costs, and market competition.