Kaijsa Received 20 NQOs (Each Option Gives Her the Right

question 76

Essay

Kaijsa received 20 NQOs (each option gives her the right to purchase 32 shares of stock for $8 per share)from her employer at the time she started working, when the stock price was $11 per share. Now that the share price is $18 per share, she intends to exercise all of her options. If Kaijsa holds the shares for two years and sells them when the market price is $25, what is the amount of the deduction and tax savings her employer will receive (assume the employer's marginal tax rate is 21 percent)?

---

Definitions:

Individual Psychology

A psychological method or theory originating in the work of Alfred Adler, focusing on the unique motivations of individuals and the importance of each person's perceived niche in society.

Deinstitutionalization

The process of replacing long-stay psychiatric hospitals with less isolated community mental health services for those diagnosed with a mental disorder.

Psychoactive Drugs

Substances that alter brain function, resulting in temporary changes in perception, mood, consciousness, and behavior.

Maltreatment

The abuse or neglect of a person, often resulting in physical, emotional, or psychological harm.