Which One of the Following Is an Argument Against Repricing

question 61

Multiple Choice

Which one of the following is an argument against repricing employee stock options?

• A) ESO's are originally issued with positive intrinsic value so there's no reason to reprice.
• B) Employees have more incentive when options are "under-water".
• C) Repricing is a reward for failure.
• D) It is unnecessary to reprice as ESOs expire quickly.
• E) Repricing affects the market price of the firm's stock for all shareholders.

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Definitions:

Information Processing

A theory that describes the way humans perceive, analyze, manipulate, store, and recall information.

Implicit Memory

A type of long-term memory that influences thoughts and behaviors without conscious awareness, such as skills, habits, and conditioned responses.

Declarative Memory

A type of long-term memory that allows individuals to recall facts and events explicitly.

Word Stems

The base part of a word to which affixes (prefixes and suffixes) can be added to form new words or variations of the word.