Which Statement Does NOT Accurately Describe Employee Share Purchase Plans

question 24

Multiple Choice

Which statement does NOT accurately describe employee share purchase plans?

• A) Employees receive shares at no cost to themselves,usually as a bonus.
• B) Employees provide a direct payment of some sort in exchange for the shares.
• C) Often the price employees pay for the shares is less than market value.
• D) Often employers will match the amount of shares purchased by the employee up to a set limit.

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Definitions:

Defined Benefits Plan

A type of pension plan where the benefits that the employee will receive upon retirement are defined in advance.

Investment Risks

Investment risks involve the potential for losing some or all of the original investment, affected by market volatility, inflation, and other factors.

Defined Benefit Plans

A type of pension plan where the employer guarantees a specified pension payment upon retirement, based on factors like salary history and years of service.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.