Question
A firm issues 1 stock option and 1 restricted stock unit to an employee. The exercise price of the stock option is $5. The
A firm issues 1 stock option and 1 restricted stock unit to an employee. The exercise price of the stock option is $5. The fair value of the option is $3. Common stock price on grant date is $5. The restricted stock unit and stock option vests 3 years later, and the employee exercises their stock option on that date, when the common stock price is $12. What is the accounting expense recorded over the life of the awards? What is the value of the awards to the employee? Expense: $8 Value to Employee: $19 Expense: $10 Value to Employee: $8 O Expense: $10 Value to Employee: $19 O Expense: $8 Value to Employee: $24 O Expense: $10 Value to Employee: $24
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started