Reference no: EM131296081
eBay’s footnote regarding employee stock compensation details the grant of 2 million options during the year of 2013, the fair-value of which was computed as $15.39. If the options have, on average, a four-year vesting schedule and the company faces a 35% tax rate on income, what affect would this option grant have on eBay’s accounts in 2013?
a. $ 2,693,250 increase to deferred tax asset, $2,693,250 decrease to tax expense
b. $10,388,250 increase to deferred tax asset, $10,388,250 decrease to tax expense
c. $ 2,693,250 decrease to deferred tax asset, $2,693,250 increase to tax expense
d. $10,388,250 decrease to deferred tax asset, $10,388,250 increase to tax expense
e. Indeterminable since the number of options exercised is unknown.
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