Which of the following statements is correct regarding stock option plans?
A)They are offered only to top-level executives and members of the board of directors.
B)Employees are likely to exercise their option to purchase the stock,if the stock price increases.
C)The company holds the stock for the benefit of the employees.
D)Stock options are provided as a retirement benefit.

Question

Quizplus · Accepted Answer

Stock option plans give employees the option to purchase company stock at a set price, often referred to as the exercise price or strike price. If the stock price increases, employees are more likely to exercise their option to purchase the stock since they will be able to sell it at a profit. Stock options are not typically provided as a retirement benefit and are not limited to top-level executives and members of the board of directors. The company does not usually hold the stock, but instead sets aside a pool of shares for employees to use if they choose to exercise their options.

Which of the Following Statements Is Correct Regarding Stock Option