Question
Under its employee stock purchase plan, Fortune Inc. encourages employee ownership by permitting all employees to buy shares directly from their company at 10% discount
Under its employee stock purchase plan, Fortune Inc. encourages employee ownership by permitting all employees to buy shares directly from their company at 10% discount and without brokerage fees. Fortune records the sale of new shares as employees buy them. Which of the following is an accurate statement regarding this policy?
a. | This approach is correct and consistent with the sale of shares to non-employees. | |
b. | The policy is correct because paid-in-capital should be reduced. | |
c. | The policy is inappropriate because substantially all employees can participate. | |
d. | The policy is inappropriate because the company should record only Common Stock (par value) when the shares are sold. | |
e. | The policy is inappropriate because the plan is compensatory. |
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