Final answer:
The difference between the stock price at the time of purchase and the price at the time an executive receives the stock option is called the Stock Spread. This term refers to the potential financial advantage for executives exercising their stock options.
Step-by-step explanation:
The difference between the stock price at the time of purchase and the lower stock price at the time an executive receives the stock option is called the Stock Spread. Therefore, the correct answer is d. Stock Spread. This represents the advantage or benefit an executive might receive if they exercise their option to buy stock at a lower pre-determined price, even if the market value has increased since then.
A share of stock represents a unit of ownership in a company which entitles the shareholder to a proportion of the corporation's assets and profits, corresponding to how much stock they own.
Firms receive money from a stock sale in their firm during the initial public offering (IPO) or when issuing new shares. However, they do not receive money when existing shares trade between investors on the secondary market.
A dividend is a distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional stock. Dividends are one way in which firms provide a return on investment to their shareholders.
A capital gain is the increase in the value of a stock (or any asset) between when it is bought and when it is sold. If an investor purchased stock at a lower price and sold it at a higher price, the profit they earned from the sale is considered a capital gain.