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Joanny Hoeger

Oct 29, 2024

Aharon exercises 10 stock options awarded several years ago. the following information pertains to the options: (1) each option gives

Aharon has exercised 10 stock options that were awarded to him several years ago. The following information pertains to these options: (1) each option grants the employee the right to purchase 10 shares, (2) the market price on the grant date was $7, (3) the strike price is $10, and (4) the market price on the exercise date is $15. How much will it cost Aharon to purchase the shares on the exercise date? a) $90 b) $500 c) $700 d) $1,000

3 Answers

A
Anonymous

Jan 31, 2025

Cost to purchase the options on the exercise date = $1000Explanation:Given:Stock options awarded = 10 Right to buy shares = 10Exercise price = $10We'll compute the cost as follow:Cost to purchase the options on the exercise date = Stock options awarded × Right to buy shares × Exercise priceCost to purchase the options on the exercise date = 10×10×10 Cost to purchase the options on the exercise date = $1000Therefore, the correct option is (d)

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