Question :
161. Which of the following is/are true concerning an employee stock : 1245768
161. Which of the following is/are true concerning an employee stock options’ benefit element? A. One cannot measure the amount of the benefit element before the exercise date. B. Stock options with exercise prices less than the current market price of the stock have a higher value, other things equal, than stock options with exercise prices exceeding the current market price of the stock.C. Stock options that are “in the money” have a higher value, other things equal, than stock options that are “out of the money”.D. choices a and b, only.E. choices a, b, and c.
162. Which of the following is/are not true concerning an employee stock options’ benefit element? A. One cannot measure the amount of the benefit element before the exercise date. B. Stock options with exercise prices less than the current market price of the stock have a higher value, other things equal, than stock options with exercise prices exceeding the current market price of the stock.C. Stock options that are “in the money” have a higher value, other things equal, than stock options that are “out of the money”.D. A stock option whose exercise price exceeds the current market price has economic value because of the possibility that the market price will exceed the exercise price on the exercise date . E. none of the above
163. Firms occasionally issue stock options in order to A. compensate employees.B. compensate managers.C. motivate employees to take actions that will increase the market value of the firm’s common shares.D. conserve cash.E. all of the above
164. If 10,000 stock warrants are issued to the general public for $10,000, and later those warrants and $150,000 are exchanged for 10,000 shares of no-par stock, the entry to record the exercise of the warrants would be: A. Cash 150,000Common Stock Warrants 10,000 Common Stock 160,000B. Cash 150,000 Common Stock 140,000 Common Stock Warrants 10,000C. Cash 150,000Common Stock Warrants 10,000 Common Stock 150,000 Add’l Paid-in Capital-Stock Warrants 10,000D. Cash 150,000 Warrant Stock 150,000E. Cash 150,000Common Stock Warrants 10,000 Warrant Stock 150,000 Add’l Paid-in Capital-Stock Warrants 10,000
165. Which of the following is/are not true concerning an employee stock options’ time value element? A. The time value element results from the possibility of increases in the market price of the stock during the exercise period. B. Time value is larger the longer the exercise period and the more volatile the market price of the stock. C. A stock option whose exercise price exceeds the current market price has economic value because of the possibility that the market price will exceed the exercise price on the exercise date. D. A stock option whose exercise price has zero intrinsic value has economic value because of the possibility that on the exercise date there would be positive intrinsic value. E. Stock options with exercise prices exceeding the current market price of the stock have a higher value, other things equal, than stock options with exercise prices less than the current market price of the stock.
166. Which of the following is/are true concerning an employee stock options’ time value element? A. One cannot measure the amount of the element before the expiration date.B. Stock options with exercise prices less than the current market price of the stock have a higher value, other things equal, than stock options with exercise prices exceeding the current market price of the stock.C. Stock options that are “in the money” have a higher value, other things equal, than stock options that are “out of the money”.D. A stock option whose exercise price exceeds the current market price has economic value because of the possibility that the market price will exceed the exercise price on the exercise date . E. none of the above
167. Which of the following is/are true regarding stock rights? A. U.S. GAAP does not require recognition of the rights on the date of the grant. B. Firms often issue stock rights to raise new capital from current shareholders. C. Shareholders may exercise the stock rights or sell them to others. D. IFRS does not require recognition of the rights on the date of the grant. E. all of the above
168. Stock warrants outstanding should be classified as A. liabilities.B. reductions of capital contributed in excess of par value.C. capital stock.D. additions to contributed capital.E. None of these choices is correct.
169. Backup Corp. received a charter authorizing 120,000 shares of common stock at $15 par value per share. During the first year of operations, 40,000 shares were sold at $28 per share. 600 shares were issued in payment of a current operating debt of $18,600. In the first year, the net income was $142,000.During the year, dividends of $36,000 were paid to stockholders. At the end of the year, total liabilities were $82,000. Use the given data to compute the following items at the end of the first year (show all computations):
(1)
Total liabilities and stockholders’ equity
(2)
Stockholders’ equity
(3)
Contributed capital
(4)
Issued capital stock (par)
(5)
Outstanding capital stock (par)
(6)
Unissued capital stock (number of shares)
(7)
Paid-In capital in excess of par value
(1)
