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:

Complement

A good or service that is used together with another good or service, increasing its demand.

Income Increase

A rise in the amount of money received by individuals or entities, typically through earnings, investments, or bonuses.

Normal Good

A good for which demand increases when consumer income rises, and falls when consumer income decreases, all other factors being equal.

Student Income

The amount of money earned or received by students from employment, grants, stipends, or other sources while pursuing their studies.