Question

Which of the following is NOT normally regarded as being a good reason to establish an...

Which of the following is NOT normally regarded as being a good reason to establish an ESOP?

a. To enable the firm to borrow at a below-market interest rate.
b. To make it easier to grant stock options to employees.
c. To help prevent a hostile takeover.
d. To help retain valued employees.
e. To increase worker productivity.

Homework Answers

Answer #1

here answer is b. To make it easier to grant stock options to employees.

Employee Stock Options Means :-

Employee stock options are issued by companies for a variety of reasons. Employee stock options are often offered by technology companies in order to offer attractive compensation packages to prospective employees. On receiving stock options, employees have more skin in the game as the value of their ESOPs only increases if the company's stock does well. This motivates employees as well as increases productivity of the employees.

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