Employee stock ownership plans (ESOPs)are potential sources of funding used by existing companies that have low to moderate confidence in the stability of their future earnings and cash flow.

Question

Quizplus · Accepted Answer

ESOPs are not primarily used as sources of funding; they are designed to provide employees with ownership interests in the company, often to align employees' interests with those of the company's owners and potentially as a strategy for succession planning. Funding typically comes from other sources.

Employee Stock Ownership Plans (ESOPs)are Potential Sources of Funding Used