Question
The following is a summary of the stock option activity at NetFlix during 2016. Options Outstanding Shares Available for Grant Number of Shares Weighted- Average
The following is a summary of the stock option activity at NetFlix during 2016.
| Options Outstanding |
| Shares Available for Grant | Number of Shares | Weighted- Average Exercise Price |
| Balances as of December 31, 2015 | 16,845,316 | 20,995,756 | 32.39 | |||
| Granted | (3,555,363 | ) | 3,555,363 | 102.03 | ||
| Exercised | (2,113,772 | ) | 17.48 | |||
| Balances as of December 31, 2016 | 13,289,953 | 22,437,347 | 44.83 |
Required:
| a. | How many options did NetFlix grant to employees during the year? At what price may NetFlix employees buy shares in the future for options granted during 2016? |
| b. | How many options did employees exercise during the year? |
| c. | When employees exercised their options during 2016, how much cash did NetFlix receive? |
| d. | Assume that NetFlix granted options at the money during 2016. How much profit did employees make at exercise? |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
