The exercise of employee stock options is a source of equity capital for a business.

Question

Quizplus · Accepted Answer

When employees exercise their stock options, they are essentially buying shares of the company's stock. This transaction generates cash for the company, which can be used as equity capital to finance the business's operations or fund growth initiatives. Therefore, the exercise of employee stock options can be a source of equity capital for a business.

The Exercise of Employee Stock Options Is a Source of Equity