Which of the Following Statements Is Untrue with Regards to Stock

question 19

Multiple Choice

Which of the following statements is untrue with regards to stock options as a form of incentives for employees?

• A)A stock option is a contract that allows the employee to purchase a share of the firm's stock at a specified price at any time up till a preset expiration date
• B)Option grants to employees typically come with a vesting period
• C)Since options are worth more if the stock price is higher, the employee has little reason to care about the firm's performance
• D)At any point after the end of the vesting period and prior to expiration, an employee can exercise their option and sell pocketing the difference between stock and exercise price
• E)If a firm's share price falls below the exercise price at expiration, the options may be worthless to the employee

---

Definitions:

Subpoena

A legal document ordering an individual to appear in court or to produce documents or other evidence in a legal proceeding.

Friendly Witnesses

Witnesses who are expected to provide testimony that supports the position of the party calling them.

Eyewitness

An individual who personally observes an event and can give a firsthand account of it.

Receipt-Of-Service

A document or acknowledgment confirming that a service has been rendered, typically used in legal and professional contexts.