Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Directing

Question:
Assertion: Under stock option schemes, employees are offered company shares at a set price which is lower than market price.

Reasoning: The allotment of shares creates a feeling of ownership to the employees and makes them to contribute for the growth of the organisation
Options:
Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.
Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.
Assertion (A) is true but Reasoning (R) is not correct.
Assertion (A) is not true but Reasoning (R) is correct.
Correct Answer:
Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.
Explanation:
Co-partnership/ Stock option: Under these incentive schemes, employees are offered company shares at a set price which is lower than market price. Sometimes, management may allot shares in lieu of various incentives payable in cash. The allotment of shares creates a feeling of ownership to the employees and makes them to contribute for the growth of the organisation.