A principal kind of stock option is a(n)

Question

Quizplus · Accepted Answer

Nonqualified stock options are the most common type of stock options granted to employees. They are usually given as compensation and provide the employee with the right to purchase company stock at a predetermined price, called the strike price.  These options are taxable as ordinary income when they are exercised, and the difference between the strike price and the fair market value of the stock is taxed as ordinary income. The other options listed (B and C) are not commonly used.

A Principal Kind of Stock Option Is A(n)