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In the debate regarding whether stock options should be an expense, which of the following...

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Question

Accounting

In the debate regarding whether stock options should be an expense, which of the following was not a reason supporting such an expense?

Multiple Choice

  • Expensing stock options would reduce the dilution effect caused by the issuance of excessive grants to top executives.

  • Expensing stock options would yield more accurate earnings measurement and restore investor confidence.

  • Expensing stock options would spur risk-taking and entrepreneurship that are crucial to innovation.

  • Expensing stock options would reduce the incentive managers have to pump-up short term earnings for market price gains.

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