In 2015 Martinez Corporation Granted Nonqualified Stock Options to Shawn

question 50

Multiple Choice

In 2015 Martinez Corporation granted nonqualified stock options to Shawn to buy 1,000 shares of Martinez stock at $15 per share exercisable for six years. At the date of grant, the stock was selling for $10 per share. In 2017 Shawn exercises the options when the market price is $40 per share. In 2018, Shawn sells the 1,000 shares of stock for $42 per share. How much is the deduction that Martinez Corporation is allowed and in which year?

• A) $5,000 in 2015
• B) $10,000 in 2015
• C) $25,000 in 2017
• D) $27,000 in 2018

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Definitions:

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, driving the evolution of species.

Behavior Genetics

A domain of inquiry that explores the interplay between genetics and the environment in determining behavior.

Self-Regulation

The process by which individuals control their behavior, emotions, and thoughts towards achieving long-term goals.

Natural Selection

A fundamental mechanism of evolution, where individuals that have certain inherited traits tend to survive and reproduce more successfully than others.