Which of the following is true about stock- based compensation? (check all that apply) Stock-based compensation expense is always reported as part of Selling, General, and Administrative (SG&A) expense The fair value of an option grant is always greater than the strike price of the option grant Stock-based compensation expense is adjusted based on movements in stock price after the exercise date Stock-based compensation expense must be added back in the Operating section of SCF under the indirect method

Which of the following is true about stock- based compensation? (check all that apply) Stock-based compensation expense is always reported as part of Selling, General, and Administrative (SG&A) expense The fair value of an option grant is always greater than the strike price of the option grant Stock-based compensation expense is adjusted based on movements in stock price after the exercise date Stock-based compensation expense must be added back in the Operating section of SCF under the indirect method

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 6Q

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According to IFRS, once the total compensation is measured at the date of grant A. It can be changed in future periods related to a change in market conditions B. It can be changed to reflect the rise or fall in the market price of the company's ordinary shares C. A company is permitted to adjust tge number of share options expected to the actual number of instruments vested D. All of the choices are correct
[The following information applies to the questions displayed below.] Similarly, we estimate the fair value of stock options at the grant date and expense it over the service period, usually from the date of grant to the vesting date. Fair value is estimated at the grant date using an option-pricing model that considers the exercise price and expected term of the option, the current market price of the underlying stock and its expected volatility, expected dividends, and the expected risk-free rate of return. Knowledge Check 01 On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exercisable no sooner than December 31, Year 3, and expire on January 1, Year 7. Each option can be exercised to acquire one share of $1 par common stock for $14. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. What is the amount of compensation expense for Year 1? Note: Round your answer to the nearest…
When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited?Required to answer. Single choice. a. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value b. Treasury stock for the purchase price c. Treasury stock for the par value and paid-in capital in excess of par for the excess of the purchase price over the par value d. Paid-in capital in excess of par for the purchase price
Select all that are true with respect to option valuation: Group of answer choices The holder of a call option has rights to the dividend on the underlying stock. The holder of a put option has rights to the dividend on the underlying stock. A call option on a dividend paying stock would be worth less than a call option on that same stock if it were non-dividend paying (i.e., all else is equal other than the dividend). A call option on a dividend paying stock would be worth more than a call option on that same stock if it were non-dividend paying (i.e., all else is equal other than the dividend).
The fair value of a stock can be determined by the factors of market forces Select one: a. True b. False
M Company prepares its financial statements using IFRS. M will record a deferred tax asset for stock options a. for the cumulative amount of the fair value of the options M has recorded for compensation expense. b. for the portion of the options’ intrinsic value earned to date times the tax rate. c. for the tax rate times the amount of compensation. d. unless the award is “in the money;” that is, it has intrinsic value.
Discuss the relevance of cum-div closing date on the valuation of an option on an underlying asset is expected to pay a dividend.
Which statement is not true regarding the market portfolio? Group of answer choices a. It includes all publicly-traded financial assets. b. It lies on the efficient frontier. c. All securities in the market portfolio are held in proportion to their market values. d. It is the tangency point between the capital market line and the indifference curve.
Describe the effect of a change in each of the following factorson the value of a call option: (1) stock price, (2) exercise price,(3) option life, (4) risk-free rate, and (5) stock return standarddeviation (i.e., risk of stock).
what is the terminology for the lowest price listed on a stock market exchange at which an investor is willing sell a specific stock? A- market price B- buyer price C- Ask price D- bid price
1. Under IFRS 2 Share-Based Payment, what is the basis for measurement of share options? A. Fair value at the date of grant. B. Fair value at each reporting date. C. Expected fair value at the date pf exercise. D. Intrinsic value at each reporting date. 2. Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall A. be credited to expense during the period the options lapse. B. be credited to income during the period that the options lapse C. remain in equity. D. be converted into a liability. 3. When should the compensation expense be recorded as a result of share options granted by the enterprise to its employees?A. During the year of grant B. During the year that the options ultimately vest C. During the years when services are required to be rendered by the employees D. During the year when the option first becomes exercisable
What is restricted stock? How do restricted stock awards differ from restricted stock units (RSUs)? Describe how compensation expense is determined and recorded for a restricted stock award plan.