Assume that you are an entrepreneur and you want to reward your employees by giving them a certain percentage of the profits that the business earns. This is known as
A) employee stock ownership plan.
B) stock option.
C) free-riding.
D) profit sharing.
E) None of the above are correct.

Question

Quizplus · Accepted Answer

Profit sharing is a plan in which employees receive a percentage of the profits earned by the business. This is a form of incentive and reward for employees, as they are motivated to work harder to increase the profits of the business. While employee stock ownership plans and stock options are also forms of employee incentives, they are based on ownership and options to purchase company stock, rather than a percentage of profits earned. Free-riding refers to a situation where an individual benefits from the work of others without contributing.

Assume That You Are an Entrepreneur and You Want to Reward