Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
Question
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Chapter 12, Problem 1PS
Summary Introduction

To discuss: Whether the given statements are true or false.

Expert Solution & Answer
Check Mark

Explanation of Solution

The false option is as follows:

Stock options offer managers the right (but not the obligation) to purchase their firm’s shares in the upcoming at a fixed price.

Hence, options (c) is false.

The true options is as follows:

The CEO from country U are paid much more than other countries CEOs.

Hence, options (a) is true.

The majority of the compensation fraction for country U’s CEOs arises from stock option grants.

Hence, options (b) is true.

Recently, country U’s accounting rules needs value of stock option grants as a recognition of compensation expense.

Hence, options (d) is true.

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