Employee stock ownership plans (ESOPs)offers managers and/or employees to borrow money from a financial institution and pay the owner the total agreed-upon price at closing;then they use the cash generated from the company's operations to pay off the debt.

Question

Quizplus · Accepted Answer

ESOPs do not involve borrowing money from a financial institution. Instead, the company establishes a trust that borrows money to purchase the owner's shares. The company then makes contributions to the trust, which uses the money to repay the loan.

Employee Stock Ownership Plans (ESOPs)offers Managers And/or Employees to Borrow