Stock options:
A)do not lose value even if the stock price ends up lower.
B)are nonmonetary forms of compensation.
C)give the owner the right to buy shares of stock at a future date at a fixed price.
D)provide one-time or lump-sum payments to employees who meet specific performance targets.
E)offer workers to purchase stock in their employing companies whenever they chose to.

Question

Quizplus · Accepted Answer

Stock options give the owner the right to buy shares of stock at a future date at a fixed price. Option A is incorrect because stock options can lose value if the stock price ends up lower than the fixed price at which the option was granted. Option B is incorrect because stock options are a form of monetary compensation. Option D is incorrect because stock options are not one-time or lump-sum payments but rather a long-term incentive. Option E is incorrect because stock options are typically granted at specific times and are subject to certain conditions and restrictions.

Stock Options