Question

Five Marks Questions :
Blue Birds Ltd. offers to its employees issue of shares at a price which is less than the market price.
(i) Name and explain the type of incentive offered to the employees.
(ii) Explain one more incentive of the same category.

Answer 1

1. The type of incentive offered is Stock option.
   

Stock option is a financial incentive. Here employees are offered the company's shares below the market price.

2. One more incentive of the same category is profit sharing. Here share in the profits of the firm serves as a good incentive.