Question
Under its employee stock purchase plan, Watson Company encourages employee ownership by permitting all employees to buy shares directly from their company at a 15%
Under its employee stock purchase plan, Watson Company encourages employee ownership by permitting all employees to buy shares directly from their company at a 15% discount and without brokerage fees. Watson simply records the sale of new shares as employees buy them. Which of the following is an accurate statement regarding the companys policy?
A) This approach is conceptually correct and consistent with the sale of shares to non-employees.
B) The policy is appropriate as long substantially all employees can participate and employees have no longer than one month after the price is fixed to decide whether to participate.
C) The company should record compensation expense when the shares are sold.
D) The policy is inappropriate because the plan is noncompensator.
PLEASE EXPLAIN
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