When Tim joined Alamo Scientific as a sales manager, part of his sign-on bonus included the opportunity to buy up to 500 shares of the company's publicly traded stock at $10 per share, during the first three months of employment. The stock was trading on the NASDAQ exchange for $22 per share. Tim's new company was offering a dividend reinvestment plan.

Question

Quizplus · Accepted Answer

The scenario describes a stock option or purchase plan, not a dividend reinvestment plan. A dividend reinvestment plan involves using dividends to purchase more shares, not buying shares at a discounted price.

When Tim Joined Alamo Scientific as a Sales Manager, Part