Which of the Following Is Not a Characteristic of a Restricted

question 83

Multiple Choice

Which of the following is not a characteristic of a restricted stock plan?

• A) The employee cannot sell the awarded shares until the vesting period has expired.
• B) A restricted stock plan has value as long as the underlying shares are selling above zero.
• C) Restricted shares are not stock options.
• D) The employee is taxed on the stock award when it is granted.

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Definitions:

Fixed Costs

Costs that do not vary with production or sales levels, including rent, insurance, and salaries, which remain constant regardless of business activity levels.

Operating Income

The profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance premiums.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, providing a more useful tool for performance evaluation.