Current GAAP Requires the Allocation of Total Share-Based Compensation Cost

question 19

True/False

Current GAAP requires the allocation of total share-based compensation cost to expense on a straight-line basis over the vesting period.

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Definitions:

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, critical for daily operations, taxes, purchasing inventory, and paying employees.

Probability

A measure of the likelihood that a specific event will occur.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of shareholder wealth maximization.

Cost of Capital

The rate of return that a business must earn on its investment projects to increase or maintain its value, encompassing the cost of debt and equity.