Question: The rationale behind granting stock options is to induce employees to work harder and be more productive. As the stuck price increases (presumably due to

The rationale behind granting stock options is to induce employees to work harder and be more productive. As the stuck price increases (presumably due to their hard work), the employees share in this added wealth. Another way to share this wealth would be to grant shares of stock, rather than options. What are the advantages and disadvantages of using stock options rather than shares of stock as employee incentives?

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In the past managers and boards of directors have viewed stock options and stock grants as almost free in the sense that they required no cash outlay ... View full answer

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