Rick Recently Received 500 Shares of Restricted Stock from His

question 39

Essay

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later, when the market price was $12. Rick held the shares for a little more than a year and sold them when the market price was $15. What is the amount of Rick's income on the vesting date? Assuming a marginal tax rate of 32 percent, what is Rick's tax on the restricted stock?

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Definitions:

Modeling

In psychology, this is a method of learning that occurs through observing and imitating others' behaviors, attitudes, or emotional expressions.

Operant Conditioning

A training technique where behavior strength is adjusted via positive reinforcement or negative punishment.

Transference Learning

The process by which knowledge or skills learned in one context are applied to or influence learning in a different context.

Conditions of Worth

Concepts in psychology referring to the belief that one must meet certain standards in order to receive positive regard from others, leading to issues in self-esteem and self-acceptance.