Companies Place a Considerable Amount of Attention on Compensation Plans

question 12

Multiple Choice

Companies place a considerable amount of attention on compensation plans because

• A) firms are likely to face stiff penalties from the government if they do not offer competitive wages and salaries.
• B) attracting the right employees with good compensation packages can translate into a competitive advantage.
• C) it is a hygiene factor.
• D) a good compensation plan will be less costly than other parts of the operation.

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Definitions:

Price Per Share

The current market value of a single share of a company's stock.

Equity-Financed

A method of funding in which a company raises capital through the sale of shares, effectively trading ownership interest for investment funds.

Incremental Value

The additional or extra value generated by taking a particular action, often compared to doing nothing or choosing an alternative.

Goodwill

An intangible asset that arises when a company acquires another business for more than the value of its tangible and identifiable intangible assets.