Executive Options Do Not Always Have the Intended Effects

question 14

Multiple Choice

Executive options do not always have the intended effects.Consider the following two statements: (i) The recent shift from executive share options to restricted stock units suggest that in practice, the
Effective minimum value of executive share options is not zero.
(ii) When options are a large portion of an executive's net worth, the total value of the option
Position to the executive is less than market value.

• A)(i) is correct, (ii) is incorrect.
• B)(i) is incorrect, (ii) is correct.
• C)Both (i) and (ii) are correct.
• D)Both (i) and (ii) are incorrect.
• E)only (i) is correct, but only if zero is replaced with "negative".

Identify the circumstances under which an investor can exert significant influence over an investee.

Understand and differentiate between various methods of accounting for long-term investments.

Calculate the acquisition-related goodwill and the investment income from equity method investees.

Understand the implications of owning different percentages of voting stock on financial reporting and consolidation.

---

Definitions:

Medical Record

A comprehensive document containing a patient's medical history, treatments received, diagnostic tests, and other healthcare information.

Surgical Procedures

Medical operations carried out to diagnose, treat, or prevent disease, involving the use of instruments to modify tissues either for repair or removal.

Informed Consent

Agreement to do something or to allow something to happen only after all the relevant facts are known.

Surgical Scissors

Specialized scissors designed for cutting body tissues during surgical operations.