What is Stock options?
Stock options: The right to buy company shares at a fixed price, used as a perk.
Where Stock options fits
Stock options is part of Owners & Shares in Finance. Owners hold shares and earn through dividends. Limited liability caps their loss at what they invested, and stock options reward staff with ownership.
Practical tip
Decide whether you want growth (reinvest) or income (dividends).
Related terms
- Shareholder
- A person or firm that owns shares in a company.
- Dividend
- A share of profit paid out to shareholders.
- Limited liability
- Owners risk only what they invested, not personal assets.
- Stock split
- Dividing shares into more shares, lowering each price without changing total value.
Formulas you will use with it
Test yourself
Which term means: “The right to buy company shares at a fixed price, used as a perk.”?
Stock split · Limited liability · Stock options
Answer: Stock options
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