Regarding Employee Stock Options (ESOs), Which of the Following Is

question 139

Multiple Choice

Regarding employee stock options (ESOs) , which of the following is not true?

• A)The exercise price is the price specified in the stock option contract for purchasing the common stock.
• B)The vesting date is the first date employees can exercise their stock options.
• C)The exercise date is the date employees exchange the option and cash for shares of common stock.
• D)The market price is the price of the stock as it trades in the market.
• E)A vesting period that depends on the firm's stock price reaching a specified target is a performance condition.

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Definitions:

Loanable Funds

Refers to the market where savers supply funds for loans to borrowers.

Durable Consumer Goods

Products that are not consumed or destroyed in use and are able to provide utility over time, such as appliances, cars, or furniture.

Loanable Funds

The money available for lending and borrowing in the financial markets.

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision.