Which of the Following Is True Regarding Stock Options

question 6

Multiple Choice

Which of the following is true regarding stock options?

• A)A loss is realized when stock options lapse.
• B)There is typically no tax effect on the grant date.
• C)Income recognized on the exercise date is greater for incentive stock options than nonqualified options.
• D)The bargain element on a nonqualified option is taxed to employees at capital gain rates.

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Definitions:

Infrahyoid

Referring to a group of muscles located below the hyoid bone in the neck, involved in swallowing and stabilizing the hyoid bone.

Pterygoid

Refers to muscles in the jaw area that are involved in jaw movements, including chewing and speaking.

Hyoglossus

A muscle in the tongue that depresses and retracts the tongue to assist in swallowing.

Orbicularis Oris

The circular muscle around the mouth that controls the movements of the mouth and lips.