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:

Aid To Management

Support or assistance provided to management teams through various tools, techniques, or resources to enhance decision-making and efficiency.

Manufacturing Overhead Budget

A financial outline estimating the expected indirect production costs, such as utilities and rent for manufacturing facilities.

Overhead Costs

Indirect expenses related to the day-to-day running of a business, such as rent, utilities, and administrative costs.

Merchandise Purchases Budget

A financial plan that estimates the cost of goods a business needs to buy to meet its sales goals.