Question

40 What role you mean by twright its equaity?​

Answer 1

Answer:

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Key Takeaways. Equity represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off. We can also think of equity as a degree of residual ownership in a firm or asset after subtracting all debts associated with that asset.

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Answer 2

Answer: Employee stock options (ESOs) are a type of equity compensation granted by companies to their employees and executives. Rather than granting shares of stock directly, the company gives derivative options on the stock instead. These options come in the form of regular call options and give the employee the right to buy the company's stock at a specified price for a finite period of time. Terms of ESOs will be fully spelled out for an employee in an employee stock options agreement.

In general, the greatest benefits of a stock option are realized if a company's stock rises above the exercise price. Typically, ESOs are issued by the company and cannot be sold, unlike standard listed or When a stock’s price rises above the call option exercise price, call options are exercised and the holder obtains the company’s stock at a discount. The holder may choose to immediately sell the stock in the open market for a profit or hold onto the stock over time.KEY TAKEAWAYS

Companies can offer ESOs as part of an equity compensation plan.

These grants come in the form of regular call options and give an employee the right to buy the company’s stock at a specified price for a finite period of time.

ESOs can have vesting schedules which limits the ability to exercise.

ESOs are taxed at exercise and stockholders will be taxed if they sell their shares in the open market.

Stock options are a benefit often associated with startup companies, which may issue them in order to reward early employees when and if the company goes public. They are awarded by some fast-growing companies as an incentive for employees to work towards growing the value of the company's shares. Stock options can also serve as an incentive for employees to stay with the company. The options are canceled if the employee leaves the company before they vest. ESOs do not include any dividend or voting rights.