Incentive stock options are frequently used by publicly held companies whereas nonqualified stock options are more typically used by privately held companies.

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Quizplus · Accepted Answer

Incentive stock options are more tax-advantaged than nonqualified stock options, so they are more attractive to publicly held companies that are subject to higher taxes. Nonqualified stock options are more typically used by privately held companies that are not subject to the same tax rates.

Incentive Stock Options Are Frequently Used by Publicly Held Companies