Question

ABC Corporation awarded John 1,000 options in 2014; each option allows him to purchase one share of ABC Corporation stock for $20. The ABC stock was selling for $18 per share at the grant date. In 2016, John exercised the options when the stock's selling price was $40 per share. In 2018, John sells the stock for $50 per share. How much income does John recognize in 2016 when he exercised the options if they are incentive stock options?

Accepted Answer

A)   $0
B)   $18,000
C)   $20,000
D)   $40,000E) B) and D)
F) A) and B)

Exam 4: Employee Compensation

Correct Answer
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Exam 4: Employee Compensation

Correct AnswerverifiedShow Answer

Correct Answer
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