Stock options: 39 Multiple Choice 0.5 points 8 00:51:43 have value only if the market price of the stock declines. References O have value only if the market price of the stock rises. are taxed at ordinary rates. O do not qualify for favorable tax treatment. Which statement best describes stock options? 44 Multiple Choice 0.5 points 8 00:47:39 Stock options are not an expense on the company's profit and loss statement. References O Stock options obligate the holder to purchase shares at a stated price. Stock options give the holder the right to purchase shares at a stated price. Stock options have been replaced by restricted stock. A clawback provision in an employment contract: 46 Multiple Choice 0.5 points 8 00:46:48 requires managers to become more conservative in their business decision-making. References O requires managers to respond to compensation committee requests for information. requires managers to return bonuses received in the event of a financial statement restatement. requires managers to refrain from making discretionary accruals. With respect to executive pay, which of the following is not correct? 47 Multiple Choice 0.5 points 8 00:46:21 The proportion of pay "at risk" falls off steeply for executives on lower rungs of the corporate ladder. References O Top executive bonus opportunities have a maximum payout of 200%. Most executive compensation packages involve a base salary, an annual incentive, and a long-term incentive. Long-term incentives are designed to counterbalance the inherently short-term orientation of other incentives