The rationale for the use of stock options is that they motivate executives to ________ and take reasonable risks that result in the company's stock price increasing.
A) work harder
B) keep an eye on the stock market
C) act like owners
D) take less initial salary

Question

Quizplus · Accepted Answer

Stock options give executives the opportunity to buy the company's stock at a fixed price in the future, and the potential for profit creates an incentive for them to act like owners and prioritize decisions that benefit the company's long-term growth and success. This can include working harder and taking reasonable risks that ultimately increase the company's stock price. Stock options do not necessarily require executives to keep an eye on the stock market or take less initial salary.

The Rationale for the Use of Stock Options Is That