Access the 2020 Annual Report for The GAP online from the company’s website. Review the financial statements and the notes to the financial statements.

1. Compute The Gap’s dividend payout ratio for the fiscal year 2020. How does it differ from the dividend payout ratio for the fiscal year 2019? To what might you attribute the difference?
2. Does The Gap have any potentially dilutive securities outstanding? If so, explain the effect of them on The Gap’s:s

a. FY2019 EPS. b. FY2020 EPS.

3. The Gap has stock options and stock award plans. How many do they have?
4. Are any of The Gap’s potential common shares anti-dilutive? State briefly how you know
5. What is the general vesting period for the company’s stock options?
6. How many stock options were exercised during the fiscal year 2020?
7. Assume that a total of 1,000,000 options were granted at the beginning of fiscal year 2016. Each option granted employees the right to purchase one share of common stock at a price of $20 per share. The options have a 4-year service period. The FV of the options were determined to be $24M. Assume all options that were exercised during fiscal-year 2020 related to these options, and that they were exercised at year-end 2020. Prepare the journal entries related to the stock options from 2016 to 2020. (If you do not know how many options were exercised in 2020, assume the amount was 100K for partial credit).

Answer rating: 100% (QA)

The Gaps dividend payout ratio for the fiscal year 2020 was 244 This is a decrease from the fiscal y... View the full answer