Regarding Employee Stock Options, Which of the Following Is/are True

question 126

Multiple Choice

Regarding employee stock options, which of the following is/are true?

• A)Firms compute a fair-value-based measure of employee stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected volatility of the stock, the expected dividends, and the risk-free interest rate.
• B)Total compensation cost is the number of options the firm expects to vest times the value per option.
• C)Firms amortize total compensation cost over the requisite service period, which is the expected period of benefit.
• D)The requisite service period is usually the period between the grant date and the vesting date.
• E)all of the above

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Definitions:

Excessive

Going beyond the usual, necessary, or proper limit or degree; characterized by overindulgence or immoderation.

Antisocial Personality Disorder

The diagnosis given a person who is in frequent conflict with society, yet who is undeterred by punishment and experiences little or no guilt and anxiety.

Instability

The state of being prone to change or failure; lacking firmness or steadiness in social, emotional, or physical realms.

Impulses

Sudden, involuntary urges to act or do something, often without premeditation.