When are incentive stock options not recognized as compensation expense?
d Under the intrinsic value method, compensation expense resulting from an incentive stock option is generally a. not recognized because no excess of market price over the option price exists at the
Does the plan offer any substantive option feature?
The plan offers no substantive option feature. d. All of these are characteristics. d Under the intrinsic value method, compensation expense resulting from an incentive stock option is generally
What is the intrinsic value of stock options?
The intrinsic value of a stock option is the difference between the market price of the stock and the exercise price of the options at the grant date. Under the fair value method, companies compute total compensation expense based on the fair value of options on the date of exercise.
What is a reasonable discount in an offer of stock?
Discount from the market price of the stock no greater than would be reasonable in an offer of stock to stockholders or others. a. is granted the option. b. has performed all conditions precedent to exercising the option. c. may first exercise the option. d. exercises the option. a. recognized in the period of exercise.
What is a Noncompensatory stock option?
Noncompensatory stock options are a specific type of plan, a benefit that allows employees to buy company stock at a specific price within a specific time frame. Compensatory stock options are designed specifically to compensate employees and are subject to various tax laws.
When accounting for stock warrants issued with other securities How should the warrant and the security be treated in accounting if the warrant is detachable?
When accounting for stock warrants issued with other securities, how should the warrant and the security be treated in accounting if the warrant is detachable? They should be treated as two securities at issuance and one security if the stock warrant is redeemed.
Which of the following is an advantage of restricted stock plan?
Which of the following is an advantage of restricted stock plans? Restricted stock may become worthless. Restricted stock can be sold before vesting occurs. Restricted stock better aligns the employee incentives with the companies' incentives.
Which of the following is not a characteristic of an employee stock purchase plan quizlet?
Which of the following is not a characteristic of an employee stock-purchase plan? It is not open to almost all full-time employees. not recognized if the market price does not exceed the option price at the date of grant.
What are options and warrants?
The option is an agreement. read more wherein buyers possess the right but not the obligation to buy or sell stock at a specified price and date. Conversely, a warrant is an instrument registered to provide the buyer the right to get a specified number of shares at a pre-decided date and prices.
How are stock warrants accounted for?
The two main rules to account for stock warrants are that the issuer must recognize the fair value of the equity instruments issued or the fair value of the consideration received, whichever can be more reliably measured; and recognize the asset or expense related to the provided goods or services at the same time.
Which of the following choices is a characteristic of stock options?
Which of the following choices is a characteristic of stock options? Employees may exercise their options by paying the strike price to the employer anytime between the vesting and expiration dates.
What is a restricted stock plan?
A Restricted Stock Plan is a common way to share stock with employees in public companies. The shareholder approved plan simply allows for the issuance of stock to selected employees. Unlike stock options, employees receive the full starting value of the shares.
What are benefits of RSU?
Advantages. RSUs provide an incentive for employees to stay with a company for the long term and help it perform well so that their shares increase in value.
Which of the following is not a requirement for a terminated employee that has exercised the conversion privilege?
Which of the following is NOT a requirement for a terminated employee that has exercised the conversion privilege? Provide Proof of insurability. A terminating employee who wants to exercise the conversion privilege must meet all of these requirements EXCEPT supply evidence of insurability.
Which of the following is a characteristic of a defined contribution plan?
Which of the following is a characteristic of a defined contribution pension plan? The benefit of gain or the risk of loss from the assets contributed to the pension fund are borne by the employee.
What is an exercise of stock options?
Exercising a stock option means purchasing the issuer's common stock at the price set by the option (grant price), regardless of the stock's price at the time you exercise the option.