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Which of the following is normally regarded as being a good reasons to establish an ESOP?...

Which of the following is normally regarded as being a good reasons to establish an ESOP? A) To enable the firm to borrow at a below-market interest rate. B) agency costs would be the same for both companies C) To help retain valued employees. D)All of the above E) none of the above

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ESOP is the employee stock option plan. This plan provides the share of the company to the employee which is valuable for the company. ESOP help in increasing the stock price of the company as the employee wants to increase the share price. ESOP is the return to valuable employees. It helps the company to generate finance as well. ESOP motivates the employees to work in favor of the shareholders. It helps in retaining valuable employees as they become the owners of the company.

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