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Maren received 10 NQOS (each option gives her the right to purchase 14 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share. When the share price was $18 per share. she exercised all of her options. Eighteen months later she sold all of the shares for $23 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent? Multiple Choice $0 gain and $0 tax. $700 gain and $140 tax. $700 gain and $259 tax. $2,100 gain and $420 tax.

Maren received 10 NQOS (each option gives her the right to purchase 14 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share. When the share price was $18 per share. she exercised all of her options. Eighteen months later she sold all of the shares for $23 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent? Multiple Choice $0 gain and $0 tax. $700 gain and $140 tax. $700 gain and $259 tax. $2,100 gain and $420 tax.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Maren received 10 NQOs (each option gives her the right to purchase 14 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share. When the share price was $18 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $23 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent? Multiple Choice $0 gain and $0 tax. $700 gain and $140 tax. $700 gain and $259 tax. $2,100 gain and $420 tax.
Transcribed Image Text:Maren received 10 NQOs (each option gives her the right to purchase 14 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share. When the share price was $18 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $23 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent? Multiple Choice $0 gain and $0 tax. $700 gain and $140 tax. $700 gain and $259 tax. $2,100 gain and $420 tax.
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