Question: Assume that you will soon graduate from college and that

Assume that you will soon graduate from college and that you have job offers with two pharmaceutical firms. The first offer is with Alpha Research, a relatively new and aggressive company. The second is with Omega Scientific, a very well established and conservative company.
Financial information pertaining to each firm, and to the pharmaceutical industry as a whole, is as follows:


The Omega offer is for $36,000 per year. The Alpha offer is for $32,000. However, unlike Omega, Alpha awards its employees a stock option bonus based on profitability for the year. Each option enables the employee to purchase shares of Alpha’s common stock at a significantly reduced price. The more profitable this company is, the more stock each employee can buy at a discount.
Show how the above information may help you justify accepting the Alpha Research offer, even though the starting salary is $4,000 lower than the Omega Scientificoffer.
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  • CreatedApril 17, 2014
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