Long-term incentive plans in which rights are granted to executives to purchase shares of their company's stock at a fixed price for a fixed period of time are known as
A)stock options.
B)stock grants.
C)restricted stocks.
D)performance shares.

Question

Quizplus · Accepted Answer

Stock options are long-term incentive plans in which executives are granted the right to purchase shares of their company's stock at a fixed price for a fixed period of time. This fixed price is typically lower than the prevailing market price, creating an incentive for executives to work towards increasing the company's stock price. Stock grants, restricted stocks, and performance shares are other types of long-term incentives, but they do not involve the right to purchase shares at a fixed price.

Long-Term Incentive Plans in Which Rights Are Granted to Executives