Which One of the Following Statements Is Not True with Regard

question 99

Multiple Choice

Which one of the following statements is not true with regard to employee compensatory share option plans?

• A) When a stock option is exercised under a compensatory stock option plan, the newly issued common stock is recorded at the exercise price and the value of the options at the grant date.
• B) When stock warrants are issued under a noncompensatory stock option plan, no formal journal entry is required to record the stock warrants.
• C) When a stock option is exercised under a compensatory stock option plan, the newly issued common stock is recorded at the exercise price and the previously recorded value of the warrants.
• D) For federal income tax purposes, any gains resulting from stock options earned by employees are taxed at ordinary income tax rates.

---

Definitions:

Corporate Mergers

The combination of two or more companies into a single entity, often with the aim of boosting growth, reducing competition, and achieving economies of scale.

Oligopolies

Are giant corporations that control part of an economy. They are few in number and tend not to compete against one another. Instead, they can set prices at levels that are most profitable for them.

Primary Labour Market

describes sectors of the economy that offer high-paying jobs, secure employment, good working conditions, and benefits.

Supply And Demand

An economic model explaining price determination in a market based on the relationship between the quantity of a commodity available and the desire of buyers for it.