Which One of These Is Not a Reason Why Executives

question 35

Multiple Choice

Which one of these is not a reason why executives place less value on employee stock options than their face value would indicate?

• A)The option's value depends on the stock price exceeding the exercise price.
• B)Options must generally be held for a period of time.
• C)Options may create a highly undiversified portfolio for the executive.
• D)Options always create taxable income for the executive when granted.
• E)Options could be out of the money.

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