$[$The following information applies to the questions displayed below.$]$

Pratt is ready to graduate and leave College Park. His future employer $($Ferndale Corporation$)$ offers the following four

compensation packages from which Pratt may choose. Pratt will start working for Ferndale on January $1,$ year $1.$

Assume that the restricted stock is $1,000$ shares that trade at $$5$ per share on the grant date $($January $1,$ year $1)$; shares are

expected to be worth $$10$ per share on the vesting date at the end of year $1$; and no $83($b$)$ election is made. Assume that

the NQOs $(100$ options$)$ each allow the employee to purchase $10$ shares at $$5$ exercise price. The stock trades at $$5$ per

share on the grant date $($January $1,$ year $1)$ and is expected to be worth $$10$ per share on the vesting date at the end of year

$1,$ and the options are exercised and sold at the end of the year. Also assume that Pratt spends on average $$3,000$ on

health$-$related costs that will be covered by insurance if he had coverage or is an after$-$tax expense if he isn't covered by

insurance $($treat this as a cash outflow$).$ Assume that Pratt's marginal tax rate is $35$ percent. $($Ignore FICA taxes and time

value of money considerations$).$

c$-2.$ Assuming Pratt chooses Option $3$ and sells the stock on the vesting date $($on the last day of year $1),$ complete Pratt's Form $8949$ for the sale of the restricted

stock.