Question

Going Green has begun to offer its employees the option of buying stock in the company as a benefit because they do not offer a retirement package. What employee behavior will Going Green most likely see?

Answer 1

Answer:

These are the options for the question:

A) The employees will draw in more clients to receive an increase.

B) The employees will seek further education to make smarter investment decisions.

C) The employees will perform to get a larger share of the profit.

D) The employees will work hard to make the stock rise, so they can buy more at a cheaper price.

E) The employees will produce more to get paid more.

And this is the correct answer:

C) The employees will perform to get a larger share of the profit.

Explanation:

If the employees receive stock instead of retirement benefits, they become owners of the corporation, even if each employee received only one stock (which is not likely the case).

Because of this, employees will try to perform better in order to increase the value of the company, represented by the value of its stocks, because the higher this value, the higher the dividend that the employees will received.