An Employee Stock Option Plan Is

question 60

Multiple Choice

An employee stock option plan is

• A) a perk usually only given to the board of directors as compensation.
• B) a plan that only partnerships can use to defer compensation to partners.
• C) a way to align the interests of employees with those of the owners.

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Definitions:

Yield-To-Maturity

The total return anticipated on a bond if it is held until it matures, including all payments from interest and principal, calculated as an annual rate.

Zero-Coupon Bond

A bond that does not pay periodic interest payments and is sold at a discount from its face value. The bond's profit comes from the difference between its purchase price and its face value at maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, including interest payments and the difference between the bond’s purchase price and its face value.

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, including the principal and any accrued interest.