Employee Stock Options Are Particularly Popular with Start Ups Because

question 1

Multiple Choice

Employee stock options are particularly popular with start ups because

• A) They encourage employees to work hard
• B) The start up cannot afford to pay high salaries
• C) The risk associated with the company's success is shared with employees.
• D) All of the above

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Definitions:

Miller-Orr Model

A financial model that helps in managing cash flows and cash reserves of firms, focusing on maintaining an optimal balance level.

Interest Rate

The percentage charged on a loan or paid on deposits over a specific period, reflecting the cost of borrowing or the gain on savings.

Target Cash Balance

The ideal amount of cash that a company aims to hold to meet operational and transaction needs while minimizing holding costs.

Miller-Orr Model

A model used in financial management to determine the optimal level for cash balances under uncertainty.