Which of the Following Statements Regarding Disclosures for Stock-Based Compensation

question 35

Multiple Choice

Which of the following statements regarding disclosures for stock-based compensation plans is false?

• A) An entity is required to disclose the intrinsic values of outstanding stock options granted.
• B) The effect on the stock-based compensation plans on the entity's cash flows must be disclosed.
• C) An entity must disclose information only for vested shares that are exercised and exercisable.
• D) An entity must provide a reconciliation of beginning and ending amounts for the number and weighted average exercise price of share options.

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Definitions:

Over-Optimism

A bias in judgment or planning that causes people to overestimate the likelihood of positive outcomes.

Reasoning Errors

Mistakes in logic or judgement that can lead to incorrect conclusions or decisions.

Financial Decisions

involve the process of making choices regarding investments, budgeting, savings, and spending, affecting an individual's or entity's financial health.

Myopic Loss Aversion

The behavioral finance theory suggesting that investors are more sensitive to losses than to gains, influencing shorter-term investment decisions adversely.