Which of the Following Statements in Relation to Modifications to the Terms

question 18

Multiple Choice

Which of the following statements in relation to modifications to the terms and conditions on which equity instruments were granted as part of an employee share scheme is correct?

• A) a reduction in the exercise price of options will reduce the fair value of the share options
• B) a reduction in a performance hurdle relating to profitability targets will reduce the fair value of the options
• C) a shortening of the vesting period will increase the fair value of the share options.
• D) an increase in the number of equity instruments granted is not an example of a modification

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Definitions:

Stock Investment

Placing capital into stocks or equity securities of companies to potentially earn returns through dividends or capital gains.

Operating Activity

Transactions and events that are directly related to the primary business operations of a company, such as sales revenue and expense transactions.

Financing Activity

Transactions involved in raising, repaying, or restructuring the capital funding of a company, as reflected in the cash flow statement.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from revenue.