Which of the Following Statements Regarding the Backdating of Options

question 38

Multiple Choice

Which of the following statements regarding the backdating of options is FALSE?

• A)Backdating refers to the practice of choosing the grant date of a stock option retroactively,so that the date of the grant would coincide with a date when the stock price was at its low for the quarter or for the year.
• B)Unless it is reported in a timely manner to the IRS and to shareholders,and reflected in the firm's financial statements,backdating is illegal.
• C)The use of backdating suggests that some executive stock option compensation may not truly have been earned as the result of good future performance of the firm.
• D)By backdating the option,the executive receives a stock option that is already out-of-the-money,with a strike price equal to the higher price on the supposed grant date.

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Definitions:

Antiporters

Antiporters are proteins that transport two or more ions or molecules in opposite directions across a cell membrane, crucial for maintaining cellular ion balance.

Hypertonic

A term referring to a solution having an osmotic pressure (or solute concentration) greater than that of the solution with which it is compared. Compare with hypotonic and isotonic.

Osmotic Pressure

The pressure that must be exerted on the hypertonic side of a selectively permeable membrane to prevent diffusion of water (by osmosis) from the side containing pure water.

Turgor Pressure

The force within the cell that pushes the plasma membrane against the cell wall.