Practicing Success
Practicing Success
CUET Preparation Today
What does "grant" refer to in the context of an employee's Stock Option Plan (ESOP)? |
The process of vesting shares to employees Giving employees the right to apply for shares at a predetermined price The date on which employees exercise their stock options The date on which the company goes public |
Giving employees the right to apply for shares at a predetermined price |
The correct answer is option 2- Giving employees the right to apply for shares at a predetermined price. A company may offer option to its employees and employee directors to subscribe shares of the company at lower than its market value or fair value at a future date. It is known as Employees Stock Option Plan (ESOP). It being an option granted by the company, an employee may or may not exercise the right to subscribe. Grant means giving an option to the Employees to subscribe to the shares of the company at a pre-determined price. |
