An employee will not redeem a liability-classified award when the stock is out of the money.

Name: An employee will not redeem a liability-classified award when the stock is out of the money.
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Question

Quizplus · Accepted Answer

An employee will not redeem a liability-classified award when the stock is out of the money because there is no economic incentive to do so. The employee would only redeem the award if the stock price was above the exercise price, in which case they would be able to sell the stock for a profit.

An Employee Will Not Redeem a Liability-Classified Award When the Stock