Kaijsa Received 20 NQOs (Each Option Gives Her the Right

question 77

Essay

Kaijsa received 20 NQOs (each option gives her the right to purchase 30 shares of stock for $8 per share) from her employer at the time she started working when the stock price was $9 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:

Personality Type

A classification that reflects the characteristic patterns of thoughts, feelings, and behaviors that make a person unique.

Fixated Stage

A concept in Freudian psychoanalysis that suggests a person may be stuck at an early developmental stage due to unresolved conflicts.

Freudian Stage

Stages of psychosexual development outlined by Sigmund Freud, theorized to influence personality based on the focus of libidinal energies at different ages.

Fixation Evidence

Data or observations supporting the psychological concept that individuals can become stuck at an early developmental stage, affecting future behavior and attitudes.