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)?

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Definitions:

Phallic Stage

A phase in Freudian psychosexual development where a child's focus of libido is on the genital area and begins to identify with the same-sex parent.

Mother

A female parent who has given birth to, raised, or nurtured a child.

Erogenous Zone

Specific areas of the body that are particularly sensitive to touch and can lead to sexual arousal when stimulated.

Infancy

The earliest period in human development, extending from birth to approximately 2 years of age, characterized by rapid physical and cognitive growth.