Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________
A) benefits such as these are too costly for these types of start-up companies
B) extra profits are reinvested into the company, not into company stocks
C) limited liability companies do not have shareholders or stock
D) approval of stock benefits is difficult due to the number of members
E) LLC members are limited to just U.S. residents
C
Explanation: C) LLCs are attractive to many new business owners because they are simpler to maintain than corporations; however, one drawback is that limited liability companies are unable to offer certain fringe benefits to members. Furthermore since they do not issue stock, LLCs cannot offer stock options to employees.
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According to Table M7-3, which is the final simplex tableau for a problem with two variables and two constraints, what can be said about the optimal solution and the constraints?
A) There is slack remaining in the first constraint. B) There is slack remaining in the second constraint. C) There is slack remaining in both constraints. D) There is no slack remaining in either constraint. E) None of the above
National Gridlock's capital structure consisted of $125 million of debt and $250 million of equity before it issued bonds to borrow an additional $125 million. The new funds will be used to finance infrastructure improvements and expansion
The company believes that the project will generate enough cash to retire 1/5 of the bonds each year. How do the borrowing and the repayment plan affect the discount rate(s) that should be used to evaluate this project?