Aharon exercises 10 stock options awarded several years ago.The following information pertains to the options: (1) each option gives the employee the right to buy 10 shares, (2) the market price on the grant date was $7, (3) the strike price is $10,and (4) the market price on the exercise date was $15.How much will it cost Aharon to purchase the options on the exercise date?
A)$90.
B)$500.
C)$700.
D)$1,000.$1,000 (10 options × 10 shares × $10 exercise price) .

Question

Quizplus · Accepted Answer

Each option gives the right to buy 10 shares at a strike price of $10, meaning Aharon would have to pay $10 per share. As he exercises 10 options, he would need to purchase a total of 10 x 10 = 100 shares at $10 per share, which would cost $1,000 in total. Therefore, the correct answer is D.

Aharon Exercises 10 Stock Options Awarded Several Years Ago