AASB 2 Lists a Number of Factors That Need to Be

question 46

Multiple Choice

AASB 2 lists a number of factors that need to be considered when valuing an executive share option.They include:

• A) The expected volatility of the share price.
• B) The exercise price of the share.
• C) The life of the underlying share.
• D) The expected volatility of the share price and the exercise price of the share.
• E) The expected volatility of the share price, the exercise price of the share and the life of the underlying share

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock.

Bonds

Fixed-income securities representing a loan made by an investor to a borrower, typically corporate or governmental.

Technical Analysis

A methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.

Common Dividends

Payments made to shareholders from a corporation's earnings, distributed among holders of common stock.