Maren Received 10 NQOs (Each Option Gives Her the Right

question 63

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 when 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.What is the amount of Maren's bargain element?

• A)$0.
• B)$700.
• C)$900.
• D)$1,500.
• E)None of thesE.10 options × 10 shares × ($15 market price at exercise - $8 exercise price) .

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Definitions:

Interest

The cost of borrowing money, typically expressed as a percentage of the principal, or the gain from lending money.

Loan

A sum of money borrowed from a lender that is expected to be paid back with interest.

Compounded Quarterly

Describes interest on a loan or investment calculated four times a year.

Investment

Allocating resources, usually money, with the expectation of generating an income or profit.