For growth-oriented smaller companies,stock options are an ineffective way to preserve cash.

Question

Quizplus · Accepted Answer

Stock options can actually be an effective way for smaller companies to conserve cash while incentivizing and retaining talented employees. Stock options allow employees to obtain a share in the company's future growth without the company having to pay out large amounts of cash upfront. As the company grows and becomes more profitable, the value of the stock options increases, providing a financial benefit to both the employee and the company. Furthermore, stock options can be structured to align the interests of the employees with the long-term goals of the company, promoting loyalty and commitment to the company's success.

For Growth-Oriented Smaller Companies,stock Options Are an Ineffective Way to Preserve