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A proponent of ESOs argues that no expense should be recorded for ESOs issued to managers and other employees, since ESOs do not cost the

A proponent of ESOs argues that no expense should be recorded for ESOs issued to managers and other employees, since ESOs do not cost the employer anything. On the contrary the employer receives cash equal to the ESOs' exercise price.

Do you agree that no expense should be recorded? Explain why or why not.

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