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nds for training c) If top management has stock options that become valuable at a particular price, they will be incentivized to buy and sell stocks d) This will help the managers and stockholders learn to

nds for training c) If top management has stock options that become valuable at a particular price, they will be incentivized to buy and sell stocks d) This will help the managers and stockholders learn to

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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123) How does awarding managers stock options help align the goals of managers and stockholders?

a) If top management has stock options that become valuable at a particular price (higher than the prevailing markets price), management will b incentivized to improve company performance so the option can be exercised at the higher price

b) Stock options guide managers in allocating funds for training

c) If top management has stock options that become valuable at a particular price, they will be incentivized to buy and sell stocks

d) This will help the managers and stockholders learn to work with each other as the managers will look to stockholders for advice on stock handling

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