Which of the Following Statements Is True in the Context

question 28

Multiple Choice

Which of the following statements is true in the context of stock-based compensation?

• A) Stock options usually result in information asymmetry.
• B) Stock-based compensation schemes for executives can align management and stockholder interests.
• C) A particular cause for concern is that stock options are often granted at extremely high strike prices.
• D) Critics deny that stock-based compensations motivate managers to improve company performance.
• E) Granting more stock options often results in an increase in stockholder equity.

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Definitions:

Alarm Reaction

The initial stage in the stress response in which the body reacts to a stressor with a fight-or-flight response.

Mildly Anxious

Experiencing a low level of anxiety, characterized by slight nervousness or apprehension about a specific situation or task.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome.

Epinephrine

A hormone and medication, also known as adrenaline, used to treat severe allergic reactions and cardiac arrest, among other conditions.