June Inc issued 9.000 nonqualified stock options valued at $27.000 (in total--$3 each) Each option entitles the holder to purchase one share of stock at $5 per share. The options vest over three years - one-third in 2016 (the year of issue), one-third in 2017. and one-third in 2018. Three thousand options are exercised in 2017 at a time when the stock price of the stock is $9. What is the 2017 book-tax difference associated with the stock options (assume ASC 718 applies to the options)?

$3,000 favorable

$1,500 unfavorable

$6,000 favorable

$4,500 favorable

Answer rating: 100% (QA)

The 9 exercise price and the 5 valuation of the stock options ... View the full answer