Which of the Following Is a Reason for ESOPs' Popularity

question 47

Multiple Choice

Which of the following is a reason for ESOPs' popularity?

• A) Earnings of the trust holdings are exempt from income taxes.
• B) ESOPs provide very high risk-free retirement income.
• C) Employees can use ESOPs to buy their company during financial crises.
• D) ESOPs require companies to invest 51 percent in the company's own stocks.
• E) The employees are provided with many more stocks than they actually own.

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Definitions:

Accountants

Professionals who perform accounting functions such as audits or financial statement analysis according to prescribed methods.

Wages

Payments made to employees for their labor, typically calculated by hour, day, or piece.

Foregone Opportunities

The benefits or income missed out on when choosing one alternative over another.

Tuition

The fee charged for instruction or education provided by schools, colleges, and universities.