Kaijsa Received 20 NQOs (Each Option Gives Her the Right

question 10

Essay

Kaijsa received 20 NQOs (each option gives her the right to purchase 31 shares of stock for $9 per share)from her employer at the time she started working, when the stock price was $10 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 $26, 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:

Hong Kong-Based Company

A business entity registered or incorporated in Hong Kong, operating under the legal and regulatory framework of Hong Kong.

Toronto Stock Exchange

Canada's largest stock exchange, known for its high concentration of mining and energy stocks.

OSC

Refers to the Ontario Securities Commission, which is responsible for regulating the securities industry in Ontario, Canada, ensuring fair and transparent markets.

IFRS

International Financial Reporting Standards, a set of accounting rules prescribed by the IASB that aims to make financial statements comparable and transparent globally.