The Compensation Associated with Restricted Stock Under a Stock Award

question 55

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.

---

Definitions:

Incremental Cash Flows

The additional cash flow a business receives from undertaking a new project.

Sunk Costs

Outlays already made that cannot be refunded or retrieved.

Project Value

The total worth of a project, calculated by evaluating all incoming and outgoing cash flows to determine its overall financial benefit.