The Compensation Associated with Restricted Stock Under a Stock Award

question 77

Multiple Choice

The compensation associated with restricted stock under a stock award plan is:

• A) The book value of an unrestricted share of the same stock times the number of shares.
• B) The estimated fair value of a share of similar stock times the number of shares.
• C) Allocated to expense over the service period which usually is the vesting period.
• D) The book value of a share of similar stock times the number of shares.

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Definitions:

Deforested

Refers to the removal or clearing of forests or trees from land which is then converted for non-forest use.

Present Value

The present value of an amount of money or series of cash inflows expected in the future, discounted at a given rate of return.

Benefits And Costs

The positive outcomes (benefits) and negative outcomes (costs) associated with a particular action or investment, often analyzed in decision-making.

Weak Property Rights

Situations where ownership rights are not fully enforced, leading to potential misuse or underinvestment in resources.