Under What Terms Can an Executive Buy Stock in a Stock

question 3

Multiple Choice

Under what terms can an executive buy stock in a stock option plan?

• A) In future years at a fixed discount rate depending on performance
• B) In future years with a guaranteed return
• C) At a price equivalent to the company's book value
• D) In future years at a price determined when the stock option was issued
• E) At any date but must be approved by the company board of directors

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Definitions:

Down Payment

An initial upfront portion of the total amount due, typically associated with the purchase of expensive items like a home or car, which reduces the amount needed to be borrowed.

Lump Sum

A large single payment of money instead of a series of smaller payments or installments.

Annual Payments

Regular payments made once a year, often associated with loans, annuities, or other financial agreements.

Interest Rate

It's the rate, in the form of a percentage of the principal, charged by lenders to borrowers for asset usage.