Which of the Following Statements About Stock-Based Managerial Compensation Is

Multiple Choice

Which of the following statements about stock-based managerial compensation is correct?

A) It may cause dysfunctional behavior in the short-run as managers try to drive up the company's stock price.
B) Exercising the option as soon as it is granted will leave the manager better off from a cash standpoint.
C) Stock options are always guaranteed to increase in value over time.
D) Managers always prefer to receive stock options instead of year-end bonuses.