Question
17. A company grants its executives a plan of stock appreciation rights (SARs) as compensation. Which of the following is a fundamental difference between a
17. A company grants its executives a plan of stock appreciation rights (SARs) as compensation. Which of the following is a fundamental difference between a plan that is considered equity and a plan that is considered debt?
to. None, since SARs are always accounted for as equity.
b. The cost of the estate plan is adjusted each year until all rights are exercised, or those that were not exercised expire.
c. The cost of the debt plan is adjusted every year until all rights are exercised, or those that were not exercised expire.
d. None, as SARS are always accounted for as debt.
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