Which of the following is a reason for the popularity of employee stock ownership plans (ESOPs)?
A) ESOPs provide tax advantages to employers.
B) ESOPs provide very high risk-free retirement income.
C) Employees can use ESOPs to buy their company during financial crises.
D) ESOPs must invest at least 51 percent of their assets in the company's own stocks.
E) The employees are provided with many more shares of stock than they actually own.

Question

Quizplus · Accepted Answer

ESOPs provide tax advantages to employers as contributions made to the plan are deductible on the company's tax return, and if the plan owns 30% or more of the company's stock, the company may be able to take advantage of certain tax benefits. This is a major reason why ESOPs are popular among employers.

Which of the Following Is a Reason for the Popularity