When an Employee Stock Option Is Exercised,which of the Following

question 17

Multiple Choice

When an employee stock option is exercised,which of the following is usually true?

• A) The employee pays the market price for the shares and the company refunds the difference between the market price and the strike price
• B) The company or the company's agent buys stock in the market for the employee
• C) The company issues more shares and sells them to the employee for the strike price
• D) The employee cannot immediately sell the shares

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Definitions:

Limited Partner

An investor in a partnership who has limited liability to the extent of their investment in the partnership and does not actively manage the business.

Sue

A legal action where an individual or entity brings a lawsuit against another in a court of law.

Certificate of Limited Partnership

A legal document that formalizes the establishment of a limited partnership and outlines its terms.

Limited Liability

A legal structure where a company's owners are protected from personal responsibility for its debts or liabilities, beyond their investment in the company.