Question : 151. Which of the following is/are true regarding stock rights? A. Firms grant : 1245767

151. Which of the following is/are true regarding stock rights? A. Firms grant stock rights to current shareholders. 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. The granting of stock rights to current shareholders requires no accounting entries. E. all of the above

152. Which of the following is/are true regarding stock warrants? A. Firms issue stock warrants to the general investing public for cash or attached to bonds. B. Holders of a bond or preferred stock with common stock warrants attached can detach and redeem the warrants separately from the bond or preferred stock.C. Holders of a bond or preferred stock with common stock warrants attached receives periodic interest or preferred dividends and holds a call option to purchase common shares. D. U.S. GAAP and IFRS require the firm to measure the fair value of the stock warrants separately from the value of the associated bond or preferred stock and allocate the issue price between the two securities.E. all of the above.

153. Which of the following is/are true? A. Stock rights give their holder the right to acquire shares of stock at a specified price. B. Firms grant stock rights to current shareholders. C. Shareholders may exercise the stock rights or sell them to others. D. The  stock rights usually trade in public markets. E. all of the above

154. The accounting for employee stock options involves A. the measurement of the fair value of stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected market price volatility of the stock, the expected dividends, and the risk-free interest rate. B. calculating total compensation cost as the number of options the firm expects to vest times the fair value per option. C. factoring in the firms use of their historical experience on forfeitures due to employees terminating employment prior to vesting to estimate the expected number of options that will vest. D. amortizing the fair value of the stock options on the date of the grant over the requisite service period, which is the expected period of benefit. E. all of the above

155. Which of the following is/are not true? A. Stock rights give their holder the right to acquire shares of stock at a specified price. B. Firms grant stock rights to current shareholders. C. Shareholders may exercise the stock rights or sell them to others. D. The stock rights usually trade in public markets. E. Employees receive stock rights as a form of compensation.

156. The accounting for employee stock options does not involve A. the measurement of the fair value of stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected market price volatility of the stock, the expected dividends, and the risk-free interest rate. B. calculating total compensation cost as the number of options the firm expects to vest times the fair value per option. C. factoring in the firms use of their historical experience on forfeitures due to employees terminating employment prior to vesting to estimate the expected number of options that will vest. D. amortizing the fair value of the stock options on the date of the grant over the requisite service period, which is the expected period of benefit. E. the firm recomputing the fair value of the option at each succeeding balance sheet date to reflect new information about stock prices, volatility, dividend yield, or risk-free interest rates.

157. Which of the following is/are 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. all of the above

158. The accounting for employee stock options involves amortizing the fair value of the stock options on the date of the grant over the requisite service period, which is   A. expected period of benefit. B. one year.C. two years.D. three years.E. five years.

159. Regarding employee stock options (ESOs), which of the following is not true? A. The exercise price is the price specified in the stock option contract for purchasing the common stock.B. The vesting date is the first date employees can exercise their stock options. C. The exercise date is the date employees exchange the option and cash for shares of common stock. D. The market price is the price of the stock as it trades in the market. E. A vesting period that depends on the firm’s stock price reaching a specified target is a performance condition.

160. An understanding of the accounting for employee stock options (ESOs) requires several definitions. Which of the following is not true? A. The grant date is the date employees exchange the option and cash for shares of common stock. B. The vesting date is the first date employees can exercise their stock options. C. A vesting period that depends only on the passage of time is a service conditionD. A vesting period that depends on achieving a specified level of profitability or meeting some other nonshare-price-based target is a performance condition; E. A vesting period that depends on the firm’s stock price reaching a specified target is a market condition.