Which of the Following Is False Regarding Employee Stock Options

question 2

Multiple Choice

Which of the following is false regarding employee stock options?

• A) Employee stock options require no immediate, out-of-pocket costs to the company.
• B) They can usually be exercised immediately by the employee.
• C) They are a major recruiting tool to attract new employees.
• D) The strike price of employee stock options can be changed.
• E) They are used to align interests of shareholders and management.

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Definitions:

Substitute

A good or service that can be used in place of another good or service, often because they share similar characteristics or fulfill similar needs.

Returns To Scale

Describes how output changes in response to a proportional change in all input factors used in production.

Production Function

This concept illustrates how varying amounts of input factors affect the level of production output, showcasing how efficiency can be maximized with certain combinations of inputs.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.