Explore BrainMass

Stock Options as a Hotly Debated Issue

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Stock options has been, and continues to be, a hotly debated issue. What do you think are some of the root causes of this problem? What do you think could be done to solve, or at least partially mitigate, this problem? What parties do you think should take the lead in addressing this problem, and do you think that to date these parties have always acted in the best interests of the public? Why, or why not?

© BrainMass Inc. brainmass.com October 25, 2018, 7:49 am ad1c9bdddf

Solution Preview

The problem with stock options is that they're granted to employees to buy the stock at a certain price, which the employees can then exercise at a certain time, but many companies have abused stock option granting rights. Stock options set up an immeasurable climate for weak internal controls and fraud. Management oftentimes in the past has taken advantage of stock options and manipulated company financial information so that the stock price would move in a certain direction, and the manager then exercises the options to gain maximum value. Stock options have been reduced in recent years because companies found that as they were, the incidence and level of managerial fraud from financial data manipulation also decreased. The root cause ...

Solution Summary

This solution explains the controversy regarding stock options, the root causes of the problem, as well as solutions to the problem. All issues regarding stock options are thoroughly discussed.

See Also This Related BrainMass Solution

Merger/Acquisition Glaxo Wellcome (UK) - SmithKline Beecham

Merger/Acquisition Glaxo Wellcome (UK) - SmithKline Beecham

2. Price Paid What are the factors used in determining the price paid? What are the pros and cons of merging or acquiring another company? Done

3. Measurements of Success How can you determine whether this deal was considered a success or failure, and why? Need to be complete in essay form and properly sited and need to be including 300-400 words.

4. Behavior of Stock after Announcement. Why the acquiring company's stock rose or fell after the deal was announced? Need to be complete in essay form and properly sited and need to be including 300-400 words.

5. Expected Benefits Realized. How can you determine whether or not the anticipated benefits were realized? done

6. Special Problems of doing Business Internationally

What are at least four international financial management issues the combined company doing business internationally must address that would not be a concern of a company just doing business domestically?

What are some ways in which an international company can protect itself from any adverse effects of or risks from the issues chosen in h. above, giving specific examples from your specific companies?

View Full Posting Details