S Receives Incentive Stock Options (ISOs) as Part of a Compensation

question 13

Multiple Choice

S receives incentive stock options (ISOs) as part of a compensation plan.The unrestricted option is for 100 shares at $100 per share.S exercises the option five years later when the FMV of the stock is $190 per share.S holds the stock for five more years and then sells it for $225 per share.In the year of exercise, S has reportable amounts for regular tax purposes and for AMT purposes, respectively, of

• A)$19,000 and $0
• B)$19,000 and $9,000
• C)$0 and $9,000
• D)$0 and $19,000
• E)$0 and $0

---

Definitions:

Reference Group

refers to a group that individuals compare themselves to for self-evaluation, which influences their beliefs, behaviors, and attitudes.

Determinant Attributes

Key features or characteristics of a product or service that influence the buyer's decision to purchase.

Financial Risk

The possibility of losing money on investments or business activities, encompassing a wide range of risks including market, credit, operational, and liquidity risks.

Noncompensatory Decision Rule

At work when consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes.