A Phantom Stock Option Is Characterized by Which One of the Following

question 48

Multiple Choice

A phantom stock option is characterized by which one of the following? (Phantom Stock Options)

• A)Board of directors compensate executives
• B)There are no specific conditions for converting these into shares
• C)There are no tax advantages
• D)Retirees' income tax is higher

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity and overall financial health.

Payback Period

The length of time required to recover the cost of an investment, calculated by dividing the initial investment cost by the annual cash inflow.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Capital Rationing

The process by which a company or organization allocates limited capital resources among various possible projects or investments.