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Business, 07.10.2019 17:00 KubraDskn

Dicate whether each of the following statements related to employee stock ownership plans (esops) increases or decreases value for outside stockholders: esop statements value for outside stockholders in theory, employees who have equity in a firm will be motivated to work harder and smarter. the creation of an esop is a form of additional compensation to employees. (assume that the firm would have to provide this additional compensation in a different way if it did not create an esop.) creating an esop can be a powerful tool in warding off takeovers. rewriter printers inc. recently created an esop. the company issued 200,000 new shares of stock at $50 per share, which it sold to the esop. the esop borrowed $10 million to purchase the newly issued shares from the company. the financial institution was willing to lend the money to the esop, because rewriter printers inc. signed a guarantee for the loan. the firm used the money from the esop to repurchase its shares on the open market at $50 per share. which of the following statements describes the net effect of these transactions on rewriter printers inc.’s balance sheet? the firm’s total liabilities will increase by $10 million. the firm’s total shareholders’ equity will increase by $10 million. the amount of the firm’s total liabilities and total shareholders’ equity will remain the same.

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