Which of the Following Statements Concerning Stock-Based Compensation Schemes for Executives

question 43

Multiple Choice

Which of the following statements concerning stock-based compensation schemes for executives is NOT true?

• A) Under accounting regulations that were enforced until 2005, stock options, like wages and salaries, were expensed.
• B) Huge stock-option grants can align the interests of management and stockholders.
• C) Stock-based compensation schemes can dilute the equity of stockholders.
• D) Huge stock-option grants increase the outstanding number of shares in a company.
• E) Top managers can earn huge bonuses from stock options that were granted several years prior.

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Definitions:

Hypotension

A medical condition characterized by blood pressure that is lower than normal, which can result in symptoms like dizziness or fainting.

Coronary Heart Disease (CHD)

A disease characterized by the build-up of plaque in the coronary arteries, leading to reduced blood flow to the heart.

Depression

A common but serious mood disorder featuring persistent feelings of sadness, hopelessness, and a loss of interest or pleasure in daily activities.

Recurrent Heart Attacks

Experiencing multiple episodes of myocardial infarction, which is the interruption of blood supply to a part of the heart, causing heart cells to die.