Which of the Following Is Not True Regarding Stock Rights

question 89

Multiple Choice

Which of the following is not true regarding stock rights?

• A)U.S.GAAP does not require recognition of the rights on the date of the grant.
• B)Firms often issue stock rights to raise new capital from current employees.
• C)Shareholders may exercise the stock rights or sell them to others.
• D)IFRS does not require recognition of the rights on the date of the grant.
• E)When holders exercise the stock rights, the firm records the issue of shares at the price paid just as it records the issue of new shares for cash.

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Definitions:

Discount Rate

The rate utilized in the process of calculating the present value of a financial instrument's future cash flows by discounting them.

Accept Decision

In decision-making, particularly in business, the choice to proceed with a particular action or proposal based on analysis or criteria satisfaction.

Payback Method

An investment appraisal technique that calculates the time required to recoup the cost of an investment.

Project Analysis

The process of evaluating the viability, profitability, and risks associated with a proposed project before proceeding.