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:

Liability of Foreignness

The additional costs and risks that firms operating in a foreign country incur, compared to domestic firms.

Administrative Differences

Discrepancies in management practices, regulations, or procedures within or between organizations.

Ethnocentrism Bias

A bias indicating that customers prefer local brands over foreign brands and are willing to pay more for local brands even when the quality is inferior.

Liability of Foreignness

Disadvantages faced by companies operating in a foreign market, including cultural differences, and legal and economic barriers.