Which of the following pairs of items is not needed to calculate the after-tax proceeds for a same-day sale?
A) Strike price and market price on exercise date.
B) Market price on sale date and marginal tax rate.
C) Market price on sale date and market price on exercise date.
D) Strike price and market price on grant date.

Question

Quizplus · Accepted Answer

The strike price and market price on grant date are not relevant for calculating after-tax proceeds for a same-day sale. The relevant information is the market price on sale date and the marginal tax rate, as these are used to calculate the taxable gain on the sale and, subsequently, the after-tax proceeds. Additionally, the market price on exercise date is also not needed, as a same-day sale means the stock is sold on the same day it is exercised.

Which of the Following Pairs of Items Is Not Needed