Which of the Following Is Not a Purpose of Equity-Based

question 16

Multiple Choice

Which of the following is not a purpose of equity-based compensation?

• A)Provide risk and incentives to employees.
• B)Motivate employees by aligning employee and employer incentives.
• C)Avoid compensation limits for executives.
• D)Provides a low or no cost form of compensation.Employers have to repurchase shares or dilute ownership (incurring opportunity costs) to provide equity-based compensation.