What is the "value of option" in an ESOP?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- The difference between the market price and the issue price of the security.
The "value of option" in an Employees Stock Option Plan (ESOP) refers to the difference between the current market price of the company's shares and the exercise price or issue price specified in the stock options granted to employees. This difference represents the potential gain, an employee can realize by purchasing shares at a lower price than the current market value.