Question

Ted is retiring in five years and is thinking of selling the business. Ramon, his general manager, tells him that he, the other managers, and the employees want to buy the business from him. Ted sets up a process where all the managers and employees "buy" stock in the company each month through payroll deductions, so that in five years the employees hold 100% of the company. This is an example of:________.

A) a sale for cash plus a note.
B) a leveraged buyout.
C) a straight sale.
D) an ESOP.

Answer 1

D) an ESOP.

Step-by-step explanation:

A employee benefit program that provides interest in the company. Employees are provided withe the specific numbers of shares to ech employee who qualify. Shares are given on a prescribed basis on which they qualify.

In the given question the managers and employees are offered stock in the company. The stock is allocated on payroll basis and within 5 years 100% of the company stock will be allocated to employees

Answer 2

D) an ESOP.

Step-by-step explanation:

ESOP is known as employee stock ownership. ESOP IS when employees in a company own shares in that company.

I hope my answer helps you