Use the table for the question(s) below.
The following are the week-ending stock prices that occurred during the quarter:

-Billy,the CEO of Movin On Up Company,was granted stock options with an exercise price of $55.00 per share.Refer to the week-ending stock prices that occured during the quarter.If Movin On Up engaged in the practice of backdating,which of the following is the most likely exercise price for Billy's options?

Question

Use the table for the question(s) below.
The following are the week-ending stock prices that occurred during the quarter:
 
-Billy,the CEO of Movin On Up Company,was granted stock options with an exercise price of $55.00 per share.Refer to the week-ending stock prices that occured during the quarter.If Movin On Up engaged in the practice of backdating,which of the following is the most likely exercise price for Billy's options?

Quizplus · Accepted Answer

Backdating refers to the practice of setting the grant date of an option to a date in the past when the stock price was lower, in order to provide a greater potential profit to the option recipient. Since Billy's options were granted with an exercise price of $55.00 per share, backdating would involve setting the grant date to a week-ending stock price that was lower than $55.00. The closest option is $56.82, which occurred on week-ending day 2 of the quarter. Therefore, D is the most likely exercise price for Billy's options if backdating occurred.

Use the Table for the Question(s) Below