Mirasol Corporation Granted an Incentive Stock Option to Employee Josephine

question 72

Multiple Choice

Mirasol Corporation granted an incentive stock option to employee Josephine two years ago.The option price was $150 and the FMV of the Mirasol stock was also $150 on the grant date.The option allowed Josephine to purchase 160 shares of Mirasol stock.Josephine exercised the option this year when the stock's FMV was $250.Unless otherwise stated,assume Josephine is a qualifying employee.The results of the above transactions to Mirasol Corporation will be

• A)no compensation deduction.
• B)a compensation deduction of $16,000 on the grant date.
• C)a tax preference item of $16,000 on the exercise date.
• D)a compensation deduction of $16,000 on the exercise date.

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Definitions:

Functional Theory

A sociological perspective that interprets each part of society in terms of how it contributes to the stability of the whole society.

Credentialism

The overemphasis on certificates, degrees, or other formal qualifications as the determinant of a person's employability or social status.

Social Inequality

Refers to the unequal distribution of resources, opportunities, and rights among different social groups, often based on characteristics such as race, gender, or socioeconomic status.

Workforce Participation

The total number of individuals engaged in or looking for employment within the labor market.