The computation of the additional shares to be issued on the exercise of stock options assumes that the firm would repurchase common shares on the open market using an amount equal to the sum of all the following except :
A) any cash proceeds from such exercise
B) net incremental shares issued
C) any unamortized compensation expense on those options
D) any tax benefits that would be credited to additional paid-in capital

Question

Quizplus · Accepted Answer

The sum of all factors except net incremental shares issued would be used to repurchase common shares on the open market. However, net incremental shares issued would be the actual additional shares issued on exercise of stock options and would not be used for repurchasing shares.

The Computation of the Additional Shares to Be Issued on the Exercise