Question: Weaver Industries implements a new share-based compensation plan in 2011. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to

Weaver Industries implements a new share-based compensation plan in 2011. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to purchase 100,000, no par shares. The options vest ratably (1/3 of the options each year) over three years, expire in 10 years, and have an exercise (strike) price of $23 per share. Weaver uses the Black-Scholes model to estimate a fair-value per option of $15. The company's tax rate is 35%.

(c) In 2016, the company's stock price is $42 and the CEO exercises all of her options. Use the financial statement effects template to record the exercise.

Balance Sheet
Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital
2016 Answer Answer Answer Answer Answer

Income Statement
Revenue - Expenses = Net Income
Answer Answer Answer

(d) What tax benefit will Weaver Industries receive related to the CEO's exercise in part (c)? Answer

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