What Is the Main Purpose Behind Share Incentive Plans

question 66

Multiple Choice

What is the main purpose behind share incentive plans?

• A)The plans encourage managers to invest in the stock market.
• B)The plans are meant to align the interests of management and shareholders.
• C)The plans encourage managers to give shares as incentives for employees.
• D)all of the above

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Definitions:

Market Wage Rate

The prevailing rate of compensation offered for labor in a specific market or industry, determined by supply and demand.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input, used in decision-making about resource allocation.

Price-Taker Market

A market scenario in which sellers accept the market price as given because they have no influence over it, often due to high competition and standardized products.

Marginal Product

The additional output that is produced by utilizing one more unit of a variable input, holding all other inputs constant.