Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Resource Mobilisation

Question:

Which of the following is NOT an advantage of offering shares to employees?

Options:

Efficiency Improvement

Low Employee Turnover

Better Employee Relations

High Flotation Costs

Correct Answer:

High Flotation Costs

Explanation:

Stock options or offering shares to the employees has gained much popularity in many countries of the world. This method enables employees to become shareholders and share the profits of the company leading to:

a) Higher efficiency

b) Low labour turnover

c) Better industrial locations

d) Low floatation cost

e) Wider/higher generation of funds.