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QUESTION 4 This year, CSUEB Inc, granted a nonqualified stock option to Lucia Muoz to buy 10,000 shares of CSUEB stock for $10 per share
QUESTION 4 This year, CSUEB Inc, granted a nonqualified stock option to Lucia Muoz to buy 10,000 shares of CSUEB stock for $10 per share for five years. At date of grant CSUEB stock was selling on a regional securities market for $8 per share. CSUEB recorded $25.000 compensation expense for the estimated value of the option Five years after CSUEB granted the option to Lucia Muoz, she exercised it on a day when CSUEB stock was selling for $12.00 per share. How much income must Luca Muoz recognize in the year of exercise? A. $0 B.$5,000 C. $20,000 D. $95.000 E. $120,000
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