The logic behind stock options is that the option holders will work hard so that their company performs well and they reap some of the financial benefits.

Question

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Stock options are often given as a form of compensation to employees with the expectation that they will work hard and contribute to the success of the company. As the value of the company's stock increases, the option holder can exercise their right to buy shares at a lower price and potentially profit from the difference. This creates an incentive for employees to work towards the company's financial success.

The Logic Behind Stock Options Is That the Option Holders