Maren Received 10 NQOs (Each Option Gives Her the Right

question 59

Multiple Choice

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started working, when the stock price was $6 per share.When the share price was $15 per share, she exercised all of her options.Eighteen months later she sold all of the shares for $20 per share.How much gain will Maren recognize on the sale and how much tax will she pay, assuming her marginal tax rate is 35 percent?

• A)$0 gain and $0 tax.
• B)$500 gain and $75 tax.
• C)$500 gain and $175 tax.
• D)$1,200 gain and $180 tax.

---

Definitions:

Development

The process of change or growth that occurs in organisms over time, often referring to physical, cognitive, or emotional maturation.

Experiment

A method of scientific investigation that seeks to discover cause-and-effect relationships by introducing independent variables and observing their effects on dependent variables.

Longitudinal

A type of study or research design where the same group of individuals is observed over a prolonged period to detect changes or developments.

Antidepressants

A class of drugs designed to alleviate symptoms of depression by adjusting the balance of neurotransmitters in the brain.