In May 2011, Egret, Inc.issues options to Andrea, a corporate officer, to purchase 200 shares of Egret stock under an ISO plan.At the date the stock options are issued, the fair market value of the stock is $900 per share and the option price is $1,200 per share.The stock becomes freely transferable in 2012.Andrea exercises the options in November 2011 when the stock is selling for $1,600 per share.She sells the stock in December 2013 for $1,800 per share.

Question

Quizplus · Accepted Answer

The Answer of In May 2011, Egret, Inc.issues options to Andrea, a corporate officer, to purchase 200 shares of Egret stock under an ISO plan.At the date the stock options are issued, the fair market value of the stock is $900 per share and the option price is $1,200 per share.The stock becomes freely transferable in 2012.Andrea exercises the options in November 2011 when the stock is selling for $1,600 per share.She sells the stock in December 2013 for $1,800 per share.