Employee Stock Ownership Plans (ESOPs) Are Useful Instruments for Financing

question 23

Multiple Choice

Employee Stock Ownership Plans (ESOPs) are useful instruments for financing leveraged buyouts because in an ESOP transaction

• A)employees have a greater voice in the final decision
• B)lenders can offer below market interest rates
• C)ESOPs can be used only when employees take over management functions
• D)ESOPs attract greater external equity investments

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Definitions:

Organizational Cultures

A system of shared assumptions, values, and beliefs, which governs how people behave in organizations.

Merging

The process of combining two or more entities into one, with the goal of enhancing competitive advantages or achieving efficiencies.

Corporate Cultures

The collection of beliefs, values, behaviors, customs, and attitudes that characterize a company or organization.

Adaptive Cultures

Organizational cultures that are flexible, resilient, and responsive in adapting to changing environments and challenges.