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Accy 510 Stock Options Homework Assignment

# Accy 510 Stock Options Homework Assignment - Accy 510 Stock...

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Accy 510 Stock Options Homework Assignment Note: For this exercise we’ll assume both Apple and CA have calendar fiscal years. Also, to make calculations simple, let’s move the options grants and vesting dates to the 31 of March of each st year instead of the dates reflected in the Form 4s. Draw time lines for each grant showing the events (and possible events) and their timing through the life of the contract. 1) CA measured each Kumar grant option’s Black-Scholes option price (BSOP) at \$9.19 as of the grant date. Assume Kumar’s grant is for future services only (consistent with our class discussion). a) What is the total value of the option grant on the grant date? How much is each grade (each set of options vesting on the three different dates) worth on the grant date? b) How long of a period of time is Kumar providing services in exchange for the options, in your judgment? Explain your answer fully. c) Should CA record an entry on the books on the grant date?
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