Which of the following statements is true regarding stock options?
a. When exercised, an incentive stock option has an option price exceeding the market price.
b. When granted, a non-qualified stock option has an option price exceeding the market price.
c. The fair value of an incentive stock option equals the current market price of the stock minus the present value of the exercise price discounted at the risk free interest rate over the number of years of life of the option.
d. The value of an incentive stock option cannot be determined at the grant date,
ANSWER: C
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What will be an ideal response?
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What will be an ideal response?
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