Which of the Following Statements Regarding Stock Options Is False

question 74

Multiple Choice

Which of the following statements regarding stock options is false?

• A)Options are valuable because the executives can gain the benefits of stock price increases without bearing the risks of price declines.
• B)Options are generally given to corporate officers as a form of incentive compensation.
• C)Stock options are rights granted to executives to purchase a specific number of shares of a corporation's capital stock at a specific price for a specific time period.
• D)Measurement of the value of stock options is simply the market value of the options at the balance sheet date.
• E)Footnotes in the financial statements must reveal the number and type of options outstanding and an assessment of their value.

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Definitions:

Major depressive disorder

A mental disorder characterized by at least two weeks of pervasive sadness or loss of interest in nearly all activities, accompanied by additional symptoms such as changes in sleep, appetite, energy level, concentration, daily behavior, or self-esteem.

Self-fulfilling prophecy

A belief or expectation that an individual or group holds about a future event that manifests because the individual believes it to be true.

Self-esteem

An individual's subjective evaluation of their own worth, encompassing beliefs about oneself as well as emotional states, such as triumph, despair, pride, and shame.

Support group

A group of people with common experiences or concerns who provide each other with encouragement, comfort, and advice.