At the beginning of its first year of operations, the Barker Co. grants non qual

Question

At the beginning of its first year of operations, the Barker Co. grants non qualified options on 5,000 of its $1 par common stock. The exercise price of each option is $30. The fair market value of each option on the grant date is $6 and the options vest after 4 years. The fair market value of each common share on the grant date is $29. The tax rate is 20% in all years.

1. How much is the book value of common stock issued if all the options are exercised when the fair market value of each common share is $40 ?

Answers, $5,000: $200,000, $55,000, $195,000 and all other regarding this question on chegg are WRONG.

Explanation / Answer

Book value of common stock issued if all the options are excercised when fair market value of each common share is $40 is $55000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.