Which of the following is considered to be an important economic consequence of incentive compensation plans using stock options?
A)dilution of ownership interests.
B)the current ratio is affected.
C)the effects on the financial statements are costly to quantify.
D)the effect on cash flows

Question

Quizplus · Accepted Answer

Dilution of ownership interests is a significant economic consequence of incentive compensation plans using stock options because when employees exercise their stock options, more shares are issued, which dilutes the ownership percentage of existing shareholders.

Which of the Following Is Considered to Be an Important