On November 1 of the current year, Ms. Nguyen purchases 2,000 shares of ACME Ltd. under a stock option plan. Black Angus Ltd. is a public corporation. Ms. Nguyen provides you with the following information: • Stock Option granted on June 1 of the prior year and Fair Market Value (FMV) at the "grant" date = $7/share • Option price, offered to employees = S7/share • Stock Option exercised on Nov. 1 of the current year and FMV at the "exercise" date = $10/share On December 31 of the current year, Ms. Nguyen continues to own the 2,000 shares of ACME Ltd. The FMV of the shares on December 31 is $16 per share and Ms. Nguyen anticipates the share value will continue to increase. The taxable employment benefit arising from the stock option for Ms. Nguyen in the current year is: Choose the correct answer. O A. $18,000 O B. $14,000 OC. s0 O D. $6,000
On November 1 of the current year, Ms. Nguyen purchases 2,000 shares of ACME Ltd. under a stock option plan. Black Angus Ltd. is a public corporation. Ms. Nguyen provides you with the following information: • Stock Option granted on June 1 of the prior year and Fair Market Value (FMV) at the "grant" date = $7/share • Option price, offered to employees = S7/share • Stock Option exercised on Nov. 1 of the current year and FMV at the "exercise" date = $10/share On December 31 of the current year, Ms. Nguyen continues to own the 2,000 shares of ACME Ltd. The FMV of the shares on December 31 is $16 per share and Ms. Nguyen anticipates the share value will continue to increase. The taxable employment benefit arising from the stock option for Ms. Nguyen in the current year is: Choose the correct answer. O A. $18,000 O B. $14,000 OC. s0 O D. $6,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:On November 1 of the current year, Ms. Nguyen purchases 2,000 shares of ACME Ltd. under a stock option plan. Black Angus Ltd. is a public corporation. Ms. Nguyen provides you with
the following information:
• Stock Option granted on June 1 of the prior year and Fair Market Value (FMV) at the "grant" date = $7/share
• Option price, offered to employees = $7/share
• Stock Option exercised on Nov. 1 of the current year and FMV at the "exercise" date = $10/share
On December 31 of the current year, Ms. Nguyen continues
the share value will continue to increase. The taxable employment benefit arising from the stock option for Ms. Nguyen in the current year is:
own the 2,000 shares of ACME Ltd. The FMV of the shares on December 31 is $16 per share and Ms. Nguyen anticipates
Choose the correct answer.
O A. $18,000
O B. $14,000
O C. s0
O D. $6,000
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