Aharon exercises 10 stock options awarded several years ago. The following information pertains to the options: (1) each option gives the employee the right to buy 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 was $15. How much will it cost Aharon to purchase theoptions on the exercise date?
A) $500.
B) $90.
C) $1,000.
D) $700.

Question

Quizplus · Accepted Answer

To exercise 10 stock options, Aharon needs to buy 100 shares at the strike price of $10 per share. Therefore, the total cost to exercise the options is 100 x $10 = $1,000.

Aharon Exercises 10 Stock Options Awarded Several Years Ago