Why are stock options a controversial employee benefit, particularly for top executives?

Q: What do you think is the main issue of conflict between the stockholders and managers?

A: There are various conflicts of interest that can impact manager's decisions to act in shareholders'…

Q: What are some of the risks an investor would face when investing in a stock? In addition to the…

A: Explanation:- The chance or possibility of experiencing damages in relation to the projected returns…

Q: rights issue allows shareholders to purchase shares below market value, it may not increase…

A: Shareholders refers to the entities who buys the shares or stocks of a company and is entitle to the…

Q: How is it possible for an employee stock option to be valuable even if the firm’s stock price fails…

A: Employee stock option is an instrument granted to the employees of the company (mostly to the…

Q: Why might a company repurchase its own stock? A) It believes that the market undervalues its shares…

A: Introduction: Common stock is owners' capital contributed in the business. Holders of the common…

Q: Managers may operate in stockholders' best interests, or managers may operate in their own personal…

A: The answer is stated below:

Q: Explain how a firm might use stock options in order to incentivize a manager to work in the…

A: It is a duty of a manager to work towards the interest of shareholders/origination because manager…

Q: How is treasury stock purchased? What ethical issues may arise from buying back company stock?

A: Treasury stock can be defined as the portion of equity which is not available for public to trade,…

Q: A company wants to reward key employees and is considering a restricted stock plan. They have asked…

A: A restricted stock plan is a form of equity compensation, which provides a company's employees with…

Q: Do firms have any responsibilities to society at large? ◦Is stock price maximization good or bad…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: to consider the so-called corporate social responsibilities in making inve

A: Investment decisions relate to how a business's funds areallocated among various assets for the…

Q: k options granted to almost all employees of the firms. What is the rational for offering stock…

A: Stock option is a financial instrument which is similar in providing the features of stocks. Stock…

Q: Explain the problems associated with questionable executive compensation schemes.

A: Fraud: Fraud refers to a malicious act done by people to fulfill their own personal benefits. In…

Q: How does/can a financial intermediary reduce the risk facing them due to Adverse Selection?

A: The question is based on one of the key issue in financial market, banking industry,  about the…

Q: Why might a rational investor invest in the stock of a company that pays no dividend?

A: Investor The person or company that makes an investment with the expectation of making a profit is…

Q: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: Explain the Threat and Opportunity of Shareholder Activism ?

A: Shareholder's Activism: Shareholder activism is a technique for shareholders to influence a…

Q: Which of the following would not be an appropriate reason for a firm to repurchase its stock:   As…

A: In a stock buyback, the issuing business returns the portion of its ownership that was previously…

Q: Many financial managers and corporate officers are often criticized for (a) poor decisions, (b) lack…

A: As your business grows, you'll move from a flat structure structure, or one wherever many key…

Q: ethical custom”?

A: 1. What is ethical custom?   According to friedman, ethical custom means company shall conduct their…

Q: Why do "ethical violations end careers"?

A: The ethical considerations are highly important for management accounting and financial management…