Which is TRUE regarding stock option plans?
A)They are offered only to top-level executives and members of the board of directors.
B)Employees are likely to exercise their option to purchase the stock,if the stock price increases.
C)The company holds the stock for the benefit of the employees.
D)Stock options are provided as a retirement benefit.

Question

Quizplus · Accepted Answer

Stock options give employees the right to buy a specific number of the company's shares at a fixed price for a certain period of time. If the stock price increases beyond the exercise price, employees can buy the stock at the lower price, potentially earning a profit on the shares. This is why employees are likely to exercise their option if the stock price increases. Options A, C, and D are not universally true about stock option plans.

Which Is TRUE Regarding Stock Option Plans