Question

James Corp. issue stock options to employees under an Employee Stock Purchase Plan. Which of the following statements is correct? I. The option exercise price may not be less than the lesser of 95 II. The option cannot be exercised more than 27 months after the grant date?

1) Statement I is correct
2) Statement II is correct
3) Both statements are correct
4) Neither statement is correct

Answer 1

The correct statement is: 1) Statement I is correct.

Step-by-step explanation:

The correct statement is: 1) Statement I is correct.

Under an Employee Stock Purchase Plan, the option exercise price may not be less than the lesser of 95. This means that the option exercise price cannot be lower than 95, regardless of its market value. So, Statement I is correct.

As for Statement II, the time limit for exercising the option may vary depending on the terms of the plan. However, in this question, the time limit is not specified. Therefore, we cannot determine if Statement II is correct or not from the given information.

In conclusion, the correct statement is: 1) Statement I is correct.