Why Would the Managers of a Firm Bundle Options with Stock

question 34

Multiple Choice

Why would the managers of a firm bundle options with stock in an IPO?

• A) To increase the supply of outstanding shares in order to attract more investors
• B) To promote the dilution of common stockholders' control on assets
• C) To reduce the number of common shares that must be sold at the IPO price in order to raise the amount of money that the firm needs
• D) To bring down the earnings per share of common stockholders

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Definitions:

Energy

The capacity to do work or produce heat; it exists in various forms such as kinetic, potential, thermal, electrical, chemical, nuclear, and mass energy.

Basal Metabolic Rate

The rate of energy expenditure by the body at rest to maintain vital functions.

Brightly Lit

Describes an environment or space that is well-illuminated with light, either natural or artificial.

Cool Temperature

A temperature that is lower than the average room temperature, often perceived as refreshing or chilly.