Multiple Choice
Which of the following statements is incorrect? Employee stock options
A) are not recorded as an expense when granted if they are at or out-of-the money under the intrinsic value method.
B) will not affect the share price of the company when exercised.
C) may reduce agency costs by more closely aligning interests of stockholders and managers.
D) may increase the risk propensity of managers.
A company's net income is $100,000, and its weighted-average shares outstanding are 20,000. During the year, the company issues 5,000 ESOs at an exercise price of $20.
Correct Answer:
Verified
Correct Answer:
Verified
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