Which of the Following Statements Is Correct Regarding Stock Option

question 67

Multiple Choice

Which of the following statements is correct regarding stock option plans?

• A)They are offered only to top-level executives and members of the board of directors.
• B)Employees are likely to exercise their option to purchase the stock,if the stock price increases.
• C)The company holds the stock for the benefit of the employees.
• D)Stock options are provided as a retirement benefit.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in investment appraisal.

Salvage Value

The predicted residual worth of an asset at the end of its usefulness.

Cash Inflows

Money or funds entering a business from various sources, including sales, investments, and financing activities.

Capital Budgeting

The process of planning and managing a company's long-term investments in projects or assets.