Final answer:
The lack of diversification is not a disadvantage of an ESOP for employers but for employees. The employer might face periodic appraisal costs, the put option may strain the employer's finances, and the implementation of an ESOP dilutes existing ownership of the corporation.
Step-by-step explanation:
The question refers to the disadvantages of Employee Stock Ownership Plans (ESOPs) for employers. An ESOP is a program that provides a company's workforce with an ownership interest in the company, typically without upfront costs to the employees. Employers can face several disadvantages with ESOPs, but among the options provided, 'the lack of diversification' is not a disadvantage for the employer; it is a disadvantage for the employee participants who may have too much of their retirement savings invested in the company's stock, instead of a diversified portfolio. Disadvantages for the employer include administrative and valuation costs ('Periodic appraisal costs'), obligations to buy back shares from departing employees which can impose financial strain ('The put option may strain the employer'), and dilution of existing shareholders’ stake in the company ('It dilutes ownership of the corporation).