Question

Which of the following is NOT an example of an option found in financial claims?A. Employee stock options that provide incentives to align managers' interests with shareholdersB. Bank loans in which a firm is obligated to pay interest and principle over timeC. Convertible preferred shares that can be exchanged for common shares at a pre-specified conversionratioD. Equity owners' choice to repay risky debt to avoid bankruptcy

Answer 1

A. Employee stock options that provide incentives to align managers' interests with shareholders.

Step-by-step explanation:

A financial claim is a contractual relationship between institutional units. It entitles a creditor to receive payments from a debtor.

It also specifies rights and obligations between the two parties and states the nature of which requires to be treated as financial.