Some People Argue That Since Employee Stock Options Are Usually

question 82

Multiple Choice

Some people argue that since employee stock options are usually issued at an exercise price that is less than or equal to market value when they are granted, they have no value.However IFRS requires recording them as compensation expense.The primary reason for this is:

• A)to achieve proper matching.
• B)they are accepted by employees as compensation.
• C)the time value in the options creates economic value.
• D)the entity must use employee stock options in order to compete for talent.

Understand the concept and management of petty cash, including establishment, replenishment, and controls to minimize risks.

Analyze a company's cash flow, cash burn rate, and the ratio of cash to monthly cash expenses, and interpret the implications for business sustainability.

Identify and explain the role and significance of cash equivalents in financial statements.

Develop skills in journalizing transactions related to petty cash and other cash management activities.

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Definitions:

Cost Of Capital

The essential return rate an enterprise has to produce on its investment activities to sustain its market assessment and appeal to investors.

Cost Of Capital

The essential profit ratio a company is expected to reach in its investing endeavors to keep its marketplace value and attract financial backers.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Risk Level

The degree of uncertainty and/or potential financial loss inherent in an investment decision.