Bad Brad Received 20 NQOs (Each Option Gives Him the Right

question 53

Multiple Choice

Bad Brad received 20 NQOs (each option gives him the right to purchase 30 shares of stock for $12 per share) from his employer. At the time he started working, the stock price was $11 per share. Now that the share price is $25 per share, he exercises all of the options. Two years later Bad Brad sells the stock for $27 per share. What is Bad Brad's basis in his stock for purposes of calculating the gain or loss at the time of the sale?

• A)$7,200
• B)$7,800
• C)$15,000
• D)$16,200

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Definitions:

Coaxial Cable

A type of electrical cable consisting of a central conductor surrounded by an insulating layer and an outer conducting shield, used for the transmission of high-frequency signals.

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Cat 7 Cable

A UTP cable that is designed for 10GbE networks and offers greater throughput than Cat 6a cable.