Q5. “Fair market value of company stock” would mean market value of outstanding stock or market value of stock grants (to employees)?
Q6. It is said that the initial value of stock options determines the expense recognized. In this example it was way back in 2011. How then would this qualify as the answer for getting affected by stock price volatility?
aren’t market value of stock grants and market value of outstanding stock the same thing? if employees want to turn stocks from their compensation into cash, they have to sell it at the prevailing market price, yes?
note the keywords “annual executive compensation” in the vignette. the executives get stock options every year. it’s not a one-time compensation.
Thanks. How can entire outstanding stock be stock grants to employees? What about other shareholders …
oh, I see what you mean, yeah I just read the topic test again. this is definitely some tricky English.
but since we’re not given any info on market price of the stock and number of shares outstanding, I guess the sentence means the fair value of the stocks under the grant program
I just discovered this: http://www.investopedia.com/terms/r/restrictedstock.asp, maybe this is a kind of special stock
But that’s still one category. It cannot equate “fair market value of co. stock” which includes all categories of shareholders