Which of the following statements is correct regarding stock option plans?
A) They are offered only to top-level executives and members of the board of directors.
B) If the stock price increases, employees are likely to exercise their option to purchase the stock.
C) The company holds the stock for the benefit of the employees.
D) Stock options are provided as a retirement benefit.

Question

Quizplus · Accepted Answer

Stock option plans are offered to employees as a form of compensation, not just limited to top-level executives or board members. If the stock price increases, employees are more likely to exercise their option to purchase the stock at a lower price, which can result in gains for the employee. The employee holds the stock for their benefit, not the company. Stock options are not typically provided as a retirement benefit, but rather as a current form of compensation.

Which of the Following Statements Is Correct Regarding Stock Option