Andrew is excited about the new program at work. He will be allowed to purchase 20 shares of stock at $45 per share for a limited period. Andrew has chosen to take advantage of this plan because he expects that the market price of the stock will exceed $45. Which kind of plan is it?
A)stock option
B)gainsharing
C)employee stock ownership (ESOP)
D)windfall incentive

Question

Quizplus · Accepted Answer

A stock option plan allows employees to purchase stocks at a discounted price for a limited period with the expectation that the market price will rise, which will allow employees to sell the shares at a profit. This is exactly what Andrew is doing, making A the correct answer. Gainsharing involves sharing the company's profits with employees, ESOP involves employees owning stock in the company they work for, and a windfall incentive is a bonus given to employees based on unexpected company performance.

Andrew Is Excited About the New Program at Work