Which of the following statements is true of using stock options as incentive pay?
A) The use of stock options ensures that managers add value in terms of efficiency and customer satisfaction.
B) Stock options require an option holder to purchase the organization's stocks at its present market rate.
C) Stock options are rewarding for employees who exercise their option when the company's stock value has risen.
D) Low-level employees with stock options are more likely to think like owners than executives who have stock options.
E) A company's performance in the stock market tends to be significantly better if its low-level employees are provided stock options.

Question

Quizplus · Accepted Answer

Stock options give employees the option to purchase the organization's stocks at a set price, which can be lower than the current market rate. This means that if the company's stock value rises, employees can exercise their options and purchase the stock at a lower price, resulting in a financial reward.

Which of the Following Statements Is True of Using Stock