Question

Executive stock options:       A. Allow the holder the option to buy shares at a specified...

Executive stock options:

      A. Allow the holder the option to buy shares at a specified exercise price during a specified period of time.

      B.   Allow the holder the option to buy shares at a specified exercise price any time prior to the executive ceasing to be employed by the firm.

      C.   Are expensed at their intrinsic value.

      D. Permit executives to purchase restricted stock.

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Answer #1

Answer is Option A
Now lets why other option are wrong
Option B Because there is a gestation period during which holder of option has to be in continious employment of the firm therefore statment B is incomplete as Executive has to serve a period defined under this option where as B states it can be exercised any time prior to executive ceasing to be employed by the firm.
Option C states that Are expensed at their intrinsic value while they are expensed according to stock options fair value.
Option D states that Permit executives to purchase restricted stock no because in the scheme predifined number of stocks are given to executive, from which he can either exercise his right to buy all shares or some percentage of it.

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