Question 1

Tom recently received 2,000 shares of restricted stock from his employer,Independence Corporation,when the share price was $10 per share.Tom's restricted shares vested three years later when the market price was $14.Tom held the shares for a little more than a year and sold them when the market price was $12.What is the amount of Tom's income or loss on the sale?

Accepted Answer

A)   $0.
B)   $2,000 loss.
C)   $4,000 gain.
D)   $4,000 loss.E) C) and D)
F) A) and C)

Question 2

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share.When the share price was $15 per share,she exercised all of her options.Eighteen months later she sold all of the shares for $20 per share.What is the amount of Maren's bargain element?

Accepted Answer

A)   $0.
B)   $700.
C)   $900.
D)   $1,500.
E)   None of the choices are correct.F) A) and D)
G) A) and C)

Exam 12: Compensation

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Exam 12: Compensation

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