Pacific-Northwest Vocational Schools Association, post-high school vocational sc
ID: 2488227 • Letter: P
Question
Pacific-Northwest Vocational Schools Association, post-high school vocational schools, recently put in a plan in which their employees, including managers, teachers and other staff positions, could buy stock in the company with a portion of their monthly earnings. For years, the price of this over-the-counter stock has been between $21 and $28 per share. The 950 employees of the Pacific-Northwest Vocational Schools Association employees were advised that they could purchase one share of the company stock per month for $15 if they signed up for the deduction. Many employees signed up for this stock because of the favorable price, but others didn’t for various reasons. One employee did not sign up even though the proposal would appear to be very attractive to most workers, as he felt he was perfectly capable of picking his own investments outside of the workplace. What are your comments on this scenario?
Explanation / Answer
Though it is a very attractive offer for the employees to buy the share at $15 when the price for the share over the counter was somewhere between $21 and $28. This would mean an instant profit of $6 - $13 for the employees who signed up for the stock. However, the employee who did not sign up for the stock because he thought he was perfectly capable of picking his own investment outside of the workplace was also correct in his view because if the employee is actually capable of picking up his own investment outside of the workplace, he may earn even more profit that what is being offered by the plan.
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