Which of the Following Statements Is True of Stock Option

question 166

Multiple Choice

Which of the following statements is true of stock option plans?

• A) Compensation expense is recorded only if the option price is less than the stock's fair value on the grant date.
• B) Compensation is measured on the date the stock is issued.
• C) The issued stock is recorded at the market price, not the option price.
• D) They all serve to compensate employees.

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Definitions:

Delegatee

A person or party that is designated to act or make decisions on behalf of another, typically in a specified capacity or for particular issues.

Performance Duty

The obligation of a party to a contract to fulfill the terms of the agreement as specified.

Contract Right

A legal entitlement embedded within a contract that grants parties specific abilities or enforces particular obligations.

Defenses

Legal arguments and strategies used in court to justify, excuse, or mitigate an accused party's liability or wrongdoing.