Martin Corporation Granted a Nonqualified Stock Option to Employee Caroline

question 7

Multiple Choice

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2011.The option price was $150,and the FMV of the Martin stock was also $150 on the grant date.The option allowed Caroline to purchase 1,000 shares of Martin stock.The option itself does not have a readily ascertainable FMV.Caroline exercised the option on August 1,2013 when the stock's FMV was $250.Caroline sells the stock on September 5,2014 for $300 per share.Martin Corporation will be allowed a deduction of

• A)$150,000 in 2011.
• B)$100,000 in 2013.
• C)$50,000 in 2014.
• D)$100,000 in 2013 and $50,000 in 2014.

Identify how lifestyles, values, and self-concept influence consumer choices.

Understand the role of segmentation in marketing communications strategy.

Appreciate the process of segmenting markets using multiple segmentation methods.

Recognize the importance and application of benefit segmentation in targeting specific consumer needs.

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Definitions:

Annuity

A level stream of cash flows for a fixed period of time.

Preferred Stock Dividends

Dividends that are paid to preferred stockholders before any dividends are paid to common stockholders.

Perpetuity

A type of annuity that pays an infinite series of cash flows, with the first payment occurring one period from now, indefinitely into the future.

Future Value Factor

A multiplier used to calculate the estimated future value of a current investment or cash flow at a specified rate of return.