Question

in 2018, a company employee received an option to purchase the company's stock at $45 per share. if the stock is trading at $40 a share in 2020, the employee will most likely

Answer 1

Based on the stock's price in 2020, the employee will most likely not bother to exercise the options.

When are options exercised?

Options are exercised by employees or other parties when the market price of the underlying stock is more than the price that the option can be redeemed at because this would lead to profit.

The underlying stock here is trading at $40 which is less than the price of redeeming the option so the employee will not exercise the options.

Find out more on exercising options at brainly.com/question/25750529

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