Suzanne Received 20 ISOs (Each Option Gives Her the Right

question 96

Essay

Suzanne received 20 ISOs (each option gives her the right to purchase 20 shares of stock for $12 per share)at the time she started working when the stock price was $14 per share.Three years later,when the share price was $23 per share,she exercised all of her options.How much cash will Suzanne need on the exercise date?

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Definitions:

Profits

Financial gains realized when the revenue earned from business activities exceeds the expenses, costs, and taxes involved in sustaining the activities.

Intercept

In the context of linear regression, this represents the expected value of the dependent variable when all independent variables are zero; it is the point at which the regression line crosses the y-axis.

Least-squares Regression Line

The least-squares regression line minimizes the squared differences between observed and predicted values, providing the best fit line through data points.

Forbes 500 List

An annual list published by Forbes magazine that ranks the top 500 U.S. companies based on their revenue.