Kaijsa Received 20 NQOs (Each Option Gives Her the Right

question 65

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 30 percent)?

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Definitions:

Grabber

A sentence or element designed to immediately capture the reader's attention at the beginning of a text.

Problem/Causes/Solution

A method of structuring communication or analysis that identifies an issue, explores its root causes, and proposes possible solutions.

Exclude Alternatives

The act of intentionally leaving out other options or choices.

Pro/Con

A method of evaluating and presenting both the positive and negative aspects of a subject to assist in decision-making.