Question

The compensation associated with executive stock option plans is:A. The book value of a share of the company's shares times the number of options.B. The estimated fair value of the options.C. Allocated to expense over the number of years until expiration.D. Recorded as compensation expense on the date of grant

Answer 1

The correct answer is letter "B": The estimated fair value of the options.

Step-by-step explanation:

Employee Stock Options or ESOs are equity compensations given be firms typically to high-range executives. The company provides the workers with call options so employees can purchase the derivatives at a certain price and time. These types of compensations are useful as motivations for the employees to help them perform better in their duties.