Leveraged employee stock ownership plans are frequently used by owners of private businesses to
A) Hide assets
B) Motivate employees
C) Sell the firm to the employees
D) B and C
E) A, B, and C

Question

Quizplus · Accepted Answer

Leveraged employee stock ownership plans (ESOPs) are designed to motivate employees by providing them with an ownership stake in the firm. In some cases, they can also be used as a way for the owner to sell the firm to the employees, providing a succession plan and ensuring continuity of operations. However, using an ESOP to hide assets is not a legitimate purpose and would be considered fraudulent.

Leveraged Employee Stock Ownership Plans Are Frequently Used by Owners