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Doss [256]
3 years ago
14

Under its executive stock option plan, W Corporation granted options on January 1, 2021, that permit executives to purchase 28 m

illion of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No forfeitures are anticipated. The options are exercised on April 2, 2024, when the market price is $22 per share. By what amount will W's shareholders equity be increased when the options are exercised
Business
1 answer:
ratelena [41]3 years ago
3 0

Answer:

$532 million

Explanation:

Number of common stock executives are permitted to purchase = 28 million

Exercise price = Market price of the shares on the date of grant = $19 per share

Amount of increase in W's shareholders equity = 28 million * $19 = $532 million

Therefore, W's shareholders equity will increase by $532 million when the options are exercised.

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When economic growth is slow there is need to increase money supply.

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2 years ago
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The Federal Reserve System is the central bank of the United States. It was made to provide the nation with a safer, more flexible, and more stable monetary and financial system. Hope this answers the question. Have a nice day. Feel free to ask more questions.
7 0
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