Maren Received 10 NQOs (Each Option Gives Her the Right

question 109

Multiple Choice

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share. When the share price was $15 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. How much gain will Maren recognize on the sale of the shares and how much tax will she pay assuming her marginal tax rate is 37 percent?

• A)$0 gain and $0 tax
• B)$500 gain and $100 tax
• C)$500 gain and $185 tax
• D)$1,200 gain and $240 tax

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Definitions:

Emotion-focused

Emotion-focused strategies involve managing and coping with feelings directly, aiming to reduce the emotional distress associated with different situations.

Cognition-focused

Pertaining to strategies or interventions that target the processes of thinking, understanding, and decision-making.

Constructive Coping

A strategy that involves dealing with stressful situations in an effective and healthy way, focusing on problem-solving and emotional management.

Confronting Problems Directly

The approach of addressing issues head-on without avoidance, engaging in honest and open communication to resolve conflicts or challenges.