Stock Options and Profit-Sharing Plans

Which type of profit-sharing plan places cash awards in trust accounts for employees?

• A) Current Profit-Sharing Plans

• B) Deferred Profit-Sharing Plans

• C) Performance Plans

• D) Stock Option Plans

What is the main benefit of an Incentive Stock Option?

• A) Immediate cash payout.

• B) Favorable tax treatment and capital gains.

• C) Guaranteed annual salary increase.

• D) Free company products.

What is the purpose of profit-sharing plans?

• A) To provide employees with a portion of the company's profits.

• B) To offer employees company stocks at a discount.

• C) To compensate employees for overtime work.

• D) To cover commuting expenses.

How do Stock Appreciation Rights (SARs) provide income to employees?

• A) Through a fixed annual bonus.

• B) Based on the increase in stock price over a designated period.

• C) By offering discounts on company products.

• D) By providing a portion of company profits.

What does the vesting period in Restricted Stock Plans refer to?

• A) The period an employee must wait before they can sell their granted stock options.

• B) The time frame for receiving a company bonus.

• C) The period in which an employee can receive training.

• D) The time frame for repaying a company loan.

What is a stock option?

• A) A right granted by a company to purchase a number of stocks at a designated price within a specified period.

• B) A bonus payment for employees.

• C) A mandatory contribution to a retirement fund.

• D) A loan provided by the company for home improvement.

What are Employee Stock Purchase Plans (ESPPs)?

• A) Plans that allow employees to purchase stock at a discount through payroll deductions.

• B) Bonus schemes based on company performance.

• C) Retirement plans funded solely by the employer.

• D) Health insurance schemes.

What does the Graduated First-Dollar-of-Profits Formula aim to achieve?

• A) Equal payment distribution to all employees.

• B) Sharing a percentage of profits that increases with higher profit levels to motivate extraordinary performance.

• C) Fixed salary increments.

• D) Providing educational allowances for employees' children.

What is the Fixed First-Dollar-of-Profits Formula used for?

• A) To calculate annual salaries.

• B) To determine profit-sharing pools based on a specific percentage of annual profits.

• C) To allocate company stocks to employees.

• D) To provide financial assistance for home loans.

Which of the following allowances is exempt from Personal Income Tax (PIT) up to 730,000 VND/month in Vietnam?

• Travel allowance

• Lunch allowance

• Clothing allowance

• Telephone expense allowance