If the Value of a Common Stock Increases the Value

question 32

True/False

If the value of a common stock increases the value of an option to buy that stock should also increase.

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Definitions:

Equipment

Tangible property owned by a business that is used in its operations to generate income, having a useful life beyond one year.

Net Income

The net income of a company following the deduction of all expenses, taxes, and costs from its total revenues.

Prepaid Insurance

An asset account that represents insurance payments made in advance for insurance coverage that applies to future periods.

Historical Cost

The original purchase cost of an asset, as recorded in the financial statements, without adjustment for inflation or market changes.