Maren Received 10 NQOs (Each Option Gives Her the Right

question 40

Multiple Choice

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started working the stock price was $6 per share. When the share price was $15 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. How much gain will Maren recognize on the sale and how much tax will she pay assuming her marginal tax rate is 35 percent?

• A) $0 gain and $0 tax.
• B) $500 gain and $75 tax.
• C) $500 gain and $175 tax.
• D) $1,200 gain and $180 tax.

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Complex

Characterized by being composed of many interrelated parts or elements; difficult to understand or analyze.

Written Message

Communication conveyed through the use of written words or text.

Tempo

The speed at which a piece of music is played or the pace/rhythm of an activity.

Loudness

The perceived intensity or volume of a sound, affecting how loud or soft it is heard.