Indicate 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.

Chilly Moose Fruit Producer 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 Chilly Moose Fruit Producer 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.