Why Would a Firm Most Likely Offer Executive Stock Options

question 4

Multiple Choice

Why would a firm most likely offer executive stock options in a compensation package?

• A) to offer the executive long-term retirement security
• B) to provide the executive with guaranteed bonuses
• C) to encourage the executive to increase the firm's value
• D) to prevent the executive from negotiating with other firms

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Definitions:

Public Expenditures

Expenses made by the government for the development, maintenance of public services, and to support economic activities.

Crowd Out

A phenomenon where increased public sector spending reduces or eliminates private sector spending in the same market, often through higher interest rates or available financial resources.

Taxes

are compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Domestic Output

The total value of all goods and services produced within a country's borders in a specific time period, often referred to as Gross Domestic Product (GDP).