Which of the following statements is true of stock option plans?
A) They give employees the right to purchase stock in the company at a fixed price on a future date.
B) They are not a form of motivating employees.
C) The compensation expense from stock option plans is not tax deductible.
D) They must be offered to all employees.

Question

Quizplus · Accepted Answer

Stock option plans give employees the right to purchase stock in the company at a fixed price on a future date. This is one of the ways companies motivate their employees, and the compensation expense from stock option plans is tax deductible. Option plans are not required to be offered to all employees, although companies may choose to do so.

Which of the Following Statements Is True of Stock Option