Stock Option Plans
Stock Option Plans and The Issuance of Debt
Compare the two (2) main accounting issues associated with stock option plans. Make one (1) recommendation to FASB for overcoming obstacles in accounting for stock option plans. Provide one (1) specific example of the way in which your recommendation could improve the accounting for stock option plans.
Suppose management is in need of large sums of cash to finance the construction of a new manufacturing plant and is considering issuing debt to obtain the cash. However, management is unsure of whether to issue convertible debt or debt issued with stock warrants. You are the senior accountant at your company, and management has asked for your help. Explain the similarities and differences between convertible debt and debt issued with stock warrants. Also, recommend to management the type of debt which it should issue. Provide a rationale for your recommendation
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Stock option plan is basically what a company uses to ensure that the welfare of its employees is well catered for. Welfare in this case entails aspects like attracting, paying and also ensuring that employees do not leave their jobs. This is also achieved by ensuring that staffs are given a chance to buy shares at exercise price. One of the problems related with stock option…
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