Which of the following statements is untrue with regards to stock options as a form of incentives for employees?
A) A stock option is a contract that allows the employee to purchase a share of the firm's stock at a specified price at any time up till a preset expiration date
B) Option grants to employees typically come with a vesting period
C) Since options are worth more if the stock price is higher, the employee has little reason to care about the firm's performance
D) At any point after the end of the vesting period and prior to expiration, an employee can exercise their option and sell pocketing the difference between stock and exercise price
E) If a firm's share price falls below the exercise price at expiration, the options may be worthless to the employee
Correct Answer:
Verified
Q5: Which of the following terms best describes
Q11: Which of the following terms best describes
Q14: What term best describes how a firm
Q15: Which of the following jobs best represents
Q17: What term refers to the practice in
Q20: What term best describes an agent who
Q25: What type of performance measurement based process
Q25: Which of the following phrases best describes
Q29: Which of the following is least likely
Q30: What term best refers to a wage
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents