Which of the Following Is a Characteristic of an Incentive

question 20

Multiple Choice

Which of the following is a characteristic of an incentive stock option?

• A)The issuer recognizes compensation expense if the strike price is below the stock's selling price when the option is granted.
• B)The issuer recognizes a compensation deduction when the option is exercised.
• C)The option holder recognizes compensation income when the option is exercised.
• D)The option holder recognizes capital gain when the stock acquired with the option is sold.

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Definitions:

Unilateral Contract

A contract where only one party makes a promise or undertakes a performance without requiring a reciprocal agreement from the other party.

Consideration

In contract law, consideration refers to something of value exchanged between parties, forming the basis for a contract.

Promissory Estoppel

A rule in law that prohibits an individual from retracting a pledge given to another if the latter has justifiably depended on this assurance to their harm.

Quasi Estoppel

A legal doctrine preventing a party from asserting rights or facts that contradict their past actions or statements.