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:

Social Readjustment Rating Scale

A scale that measures the amount of stress in a person's life resulting from major life changes or adjustments.

Approach-avoidance

A conflict or situation where a single goal or option has both appealing and negative aspects to it, leading to ambivalence.

Social Readjustment Rating Scale

A scale that measures the stress levels of different life events to predict their impact on an individual's health.

Inherently Stressful

Referring to situations, tasks, or conditions that are naturally predisposed to causing stress or tension.