a. Mark received 10 ISOs at the time he started working for Hendricks Corporation five years ago when Hendrickss price was $4 per share (each option gives him the right to purchase 10 shares of Hendricks Corporation stock for $8 per share). Now that Hendrickss share price is $35 per share, he intends to exercise all options and hold all of his shares for more than year. Assume that more than a year after exercise, Mark sells the stock for $35 a share. What are Marks tax consequences on the exercise date assuming his ordinary marginal rate is 30 percent and his long-term capital gains rate is 15 percent? (Ignore AMT consequences)

b. Mark received 10 ISOs at the time he started working for Hendricks Corporation five years ago when Hendrickss price was $4 per share (each option gives him the right to purchase 10 shares of Hendricks Corporation stock for $8 per share). Now that Hendrickss share price is $35 per share, he intends to exercise all options and hold all of his shares for more than year. Assume that more than a year after exercise, Mark sells the stock for $35 a share. What are Marks tax consequences on the date he sells the shares assuming his ordinary marginal rate is 30 percent and his long-term capital gains rate is 15 percent? (Ignore AMT consequences)