Question

Executives receive ________ as 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.

Answer 1

Executives receive capital gain as 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.

Step-by-step explanation:

Executives receive capital gain as 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.

For example, if an executive buys a share of stock in a company for $50 and later sells it for $70, the capital gain would be $20. This is the profit that the executive would make from the stock option.

Capital gain is an important factor in executive compensation and affects their overall income from stock options.