In stock option plans, what does the difference in the grant price and the exercised price represent?
A) profits to the firm
B) the gains by the stock option
C) a loss to the firm
D) the earnings through profit sharing

Question

Quizplus · Accepted Answer

The grant price is the price at which the stock options are offered to the employees, while the exercised price is the price at which the employee buys the stock options. The difference between the two prices represents the gains made by the employee through the stock option plan. Therefore, the correct choice is B - the gains by the stock option. A, C, and D are incorrect as these options do not appropriately represent the difference in grant price and the exercised price.

In Stock Option Plans, What Does the Difference in the Grant