Reference no: EM13116575
"On August 1, 2003, the board of directors of Incent.Com approved a stock option plan for its middle managers and software design professionals (100 employees). The plan awards 1,000 shares of $5 par value common stock to each employee. The grant date is January 1, 2004. The option (exercise) price of the shares is the opening stock price on January 1, 2004 ($20). The options are nontransferable and are exercisable after December 31, 2008. The options expire when the employee leaves the company or on December 31, 2015, whichever is first. Management estimates annual forfeitures will be 4% and that the expected life of the options is 6 years. The fair value of the options based on the Black-Scholes Options Pricing Model is $8 per option. On the first exercise date, 50,000 options are exercised when the stock price is $60 per share.
a. Is this a compensatory or noncompensatory stock option plan? Explain.
b. Why would Incent (website) offer such a plan to its employees?
c. What is the grant date, vesting date, and the exercise date for the ESO plan?
d. Are the stock options "in the money" at the grant date? Explain.
e. When should total compensation cost be measured? Explain.
f. How much compensation cost should be recognized in total in relation to this stock option plan?
g. In which periods should total compensation cost be allocated to as compensation expense?
h. Explain how this ESO plan transfers wealth from stockholders to employees.
|
Money market hedge
: Describe the steps to take for a money market hedge. You need to show clearly the amounts that are related to the actions to take.
|
|
Determine the mean-median and mode of data
: Determine the mean, median and mode of those data. Make sure you show your hand computeed work. Is there any indication from this group of data that the new policy holder may lean toward younger ages?
|
|
Benefits of insurance and portfolio approach
: When is insurance beneficial? Is Insurance ever not beneficial? Explain your answer. Why is the portfolio approach an effective tool to manage risk? Explain your answer.
|
|
Find out the magnitude of the force that is applied
: Find the angle required to produce this alignment of . (Assume the pulleys are ideal.) Find out the magnitude of the force, that is applied to the femur in this case.
|
|
Describe how this eso plan transfers wealth
: The Objective of the Unit 5 IP Assignment will involve the following the Course Outcomes and Grading Criteria with their respective percentages for the Grading Rubric. Describe how this ESO plan transfers wealth from stockholders to employees.
|
|
What is probability that their child will have alkaptonuria
: A recently married man and woman discover that each had an uncle with alkaptonuria, "black urine disease", a rare disease caused by an autosomal recessive allele of a single gene. they are about to have their first baby. what is the probability th..
|
|
How many milliliters of coffee can be obtained
: A pound of coffee beans yields 30 cups of coffee (4 cups = 1 ). How many milliliters of coffee can be obtained from 1.0 of coffee beans.
|
|
Probability that selected students are graduate and female
: Of those female students, 85% of them will graduate, whereas 90% of males will successfully complete the same programme. If a new TESL student is chosen at random, what is the probability that: They graduate and they are female?
|
|
Investments and exchange rate
: Suppose 90-day investments in Britain have a 6% annualized return and a 1.5% quarterly (90-day) return. In the U.S., 90-day investments of similar risk have a 4% annualized return and a 1% quarterly (90-day) return.
|