What was the after-tax cost to shareholders


In 2004, an employee was granted 305 options on the stock of a firm with an exercise price of $20 per option. In 2009, after the options had vested and when the stock was trading at $35 per share, she exercised the option. The firm's income tax rate was 36 percent. What was the after-tax cost to shareholders of remunerating this employee with options?

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Finance Basics: What was the after-tax cost to shareholders
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