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Suppose your employer offers you a choice between a $4,900 bonus and 100 shares of the company's stock. Whichever one you choose will be awarded
Suppose your employer offers you a choice between a $4,900 bonus and 100 shares of the company's stock. Whichever one you choose will be awarded today. The stock is currently trading at $62.49 per share. a. If you receive the stock bonus and you are free to trade it, which form of the bonus should you choose? What is its value? b. If you receive the stock bonus and you are required to hold it for at least one year, what can you say about the value of the stock bonus now? What will your decision depend on? a. If you receive the stock bonus and you are free to trade it, which form of the bonus should you choose? What is its value? If you are free to trade the stock, the value of the stock bonus today is s (Round to the nearest dollar.) The value of the cash bonus is $(Round to the nearest dollar.) Which bonus should you choose? (Select from the drop-down menu.) You should choose the b. If you receive the stock bonus and you are required to hold it for at least one year, what can you say about the value of the stock bonus now? What will your decision depend on? (Choose all the answers that apply) A. Since you work for this company you are considered to be a stakeholder. This implies that, for you, the company's shares are worth more than B. Because you could buy the stock today for $6,249 if you wanted to, the value of the stock bonus cannot be more than $6249. But if you are not C. You might decide that it is better to take the $4,900 in cash than to wait for the uncertain value of the stock in one year. This would be especially D. The stock's value will depend on what you expect it to be worth in one year, as well as how you feel about the risk involved. There is no clear-cut $6,249 today. Therefore, you should take the stock bonus. allowed to sell the company's stock for the next year, its value to you could be less than $6,249. true if you believed you could invest the $4,900 today in another equally risky asset that would be worth more than the stock one year from now. answer to which alternative is best, because taking the stock today and having to hold it for a year involves risk
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