How much will receive in addition to regular salary

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Jane receives options to purchase 10,000 shares of the company's stock at $35 a share beginning in 2 years and ending in 5 years. The stock was at $30 a share on the grant date.

Problem a. Assuming Jane can work smart and hard and can contribute to raising the price of the stock to $50 a share in 3 years when she exercises her option, how much will she receive in addition to her regular salary.

Problem b. Comment on why stock options can be an important part of a compensation package for key employees.

Reference no: EM132817906

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