An ESOP is a program in which the employees create an internal source of funding by becoming investors in the company.

Question

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An ESOP (Employee Stock Ownership Plan) is a program in which a company sets up a trust fund and contributes new shares of its own stock or cash to buy existing shares. The trust then distributes the shares or cash to the company's employees. This creates an internal source of funding for the company, and the employees become investors in the company through the ownership of its stock.

An ESOP Is a Program in Which the Employees Create