The compensation associated with executive stock option plans is:
A) The book value of a share of the company's shares times the number of options.
B) The estimated fair value of the options.
C) Allocated to expense over the number of years until expiration.
D) Recorded as compensation expense on the date of grant.

Question

Quizplus · Accepted Answer

The compensation associated with executive stock option plans is the estimated fair value of the options. This value is typically determined using an option pricing model, and is then allocated to expense over the number of years until expiration. The fair value of the options is recorded as compensation expense on the date of grant.

The Compensation Associated with Executive Stock Option Plans Is