Question
George has recently joined ABC Company, a closely held corporation, and as part of his compensation program, he was offered stock appreciation rights (SARs) for
George has recently joined ABC Company, a closely held corporation, and as part of his compensation program, he was offered stock appreciation rights (SARs) for 5,000 shares of the company's stock. The terms of the SARs entitle George to be paid the difference between the fair market value (FMV) of the stock at the time of exercise and the FMV of the stock at the time the SARs were granted. If the FMV of the stock is $2 on the date of the grant and $5 upon exercise, what is the amount of award George will receive from ABC?
A)
$15,000
B)
$30,000
C)
$10,000
D)
$5,000
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