Which of the Following Statements Is CORRECTregarding Stock Option Plans

question 12

Multiple Choice

Which of the following statements is CORRECTregarding stock option plans?

• A)They are offered only to top-level executives and members of the board of directors.
• B)If the stock price increases,employees are likely to exercise their option to purchase the stock.
• C)The company holds the stock for the benefit of the employees.
• D)Stock options are provided as a retirement benefit.

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Definitions:

Cash Collected

Revenue that has been received by a company from its various business activities, such as sales or services.

Investing Activities

Financial transactions involving the purchase and sale of long-term assets and other investments not included in cash equivalents.

Cash Flow Statement

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Statement of Cash Flows

This document details the combined amount of cash a business gains from its day-to-day operations and outside investments, and the cash it expends on operating and investing activities over a particular period.