When Using the Preferred Approach to Account for a Compensatory

question 110

Multiple Choice

When using the preferred approach to account for a compensatory stock option plan, the total compensation cost is the

• A)fair value per option times the number of options issued
• B)fair value per option times the number of options that actually become vested
• C)fair value per option times an estimate, at the grant date, of the number of options expected to be deferred
• D)fair value per option times the number of options expired

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Definitions:

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Legal requirements or orders enacted by a legislative body that must be followed by entities or individuals subject to its jurisdiction.

Corporate Business

An organization engaged in commercial, industrial, or professional activities, structured as a corporation providing limited liability to its owners.

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A company whose shares are publicly traded on a stock exchange and are owned by a wide range of investors.

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The system or group of people governing an organized community, often a state, and the mechanism through which political authority is exercised.