How Would the Exercise of an Option, That Was Part

question 54

Multiple Choice

How would the exercise of an option, that was part of an initial compound instrument, be recorded?

• A)Common stock is recorded at an amount equal to the fair value of the options at date of conversion.
• B)Common stock is recorded at an amount equal to the price determined by the Black-Sholes model.
• C)Common stock is recorded at an amount equal to the market price of the shares on conversion date.
• D)Common stock is recorded at an amount equal to the cash received plus the contributed surplus initially recorded.

---

Definitions:

Different Participants

Refers to the diverse members or individuals who take part in a study, survey, or any given activity or process.

Diary Research

A qualitative research method that involves participants keeping a record of their activities, thoughts, or feelings over a period of time for later analysis by researchers.

Social Movements

Collective, organized efforts to promote or resist change in society.

Text Messages

Short, digital messages sent between mobile devices, utilizing standardized communication protocols to exchange brief texts.