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Stock Options, description and reasons for

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Explain the nature and role of ESOPs (Employee stock options) in strategic management.

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The role and nature of ESOPs (Employee stock options) serve three different functions within a publicly or potentially soon to be publicly traded company. First let us describe the roles or functions of an ESOP. The first role it serves is to encourage workers and management to do a good job and work hard. The idea behind this is more productivity can lead to more profits and with this higher stick valuations. So, if employees are tuned in to this idea, this could happen (because they'd be thinking about their future possible cash rewards when they cash in some of their options. The ESOP also helps to attract better, more educated and loyal employees as well. This is because of the previously described reasons just ...

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An expert describes in explicit detail the design of and reasons for ESOP plans.

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Financial Accounting Theory Fortune 100 Companies

Case 15-14 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000 companies and three international companies. (Consult the Preface for websites of companies or search for different companies.)

Required:
a. Review the financial statements for the three domestic companies and answer the following questions for the last reporting year:
i. What components of stockholders' equity do each of the companies disclose?
ii. Do the companies have preferred stock shares outstanding? If so, what special features do these shares contain?
iii. Do any of the companies report treasury shares? If so, do the companies disclose the reason for reacquiring @@@acquiring?@@@the shares?
iv. Do the companies disclose any stock compensation plans? If so, are they reporting such plans under the fair value or intrinsic value methods? What was the value of compensation expense measured for any outstanding stock option plans?
b. Review the financial statements for the three foreign companies and answer the following questions for the last reporting year:
i. What components of stockholders' equity do each of the companies disclose?
ii. Do the companies have preferred stock shares outstanding? If so, what special features do these shares contain?
iii. Do any of the companies report treasury shares? If so, do the companies disclose the reason for reacquiring. And acquiring?And the shares?

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