Question

Marti received 11 NQOs (each option gives Marti the right to purchase 14 shares of stock for $10 per share) at the time Marti started working when the stock price was $7 per share. When the share price was $16 per share, Marti exercised all of her options. Eighteen months later she sold all of the shares for $21 per share. What is the amount of Marti's bargain element

Answer 1

$924

Step-by-step explanation:

Bargain element per share = Market price at exercise - Exercise price

Bargain element per share = $16 per share - $10 per share

Bargain element per share = $6 per share

Amount of bargain element = Bargain element per share * (Number of options * Number of shares per option)

Amount of bargain element = $6 per share * (11 options * 14 shares per option)

Amount of bargain element = $6 per share * 154 shares

Amount of bargain element = $924

So therefore, the amount of Marti's bargain element is $924