Employee stock options:

Question

Quizplus · Accepted Answer

Employee stock options are generally issued with a zero intrinsic value, which means the exercise price equals or exceeds the current market price of the underlying stock. Intrinsic value only arises if the market price of the stock increases above the exercise price of the option. Options that are already in-the-money are usually not repriced, as this would result in diluting the existing shareholders. Backdating options to manipulate the grant date is illegal and violates accounting rules and regulations.

Employee Stock Options