Session 8

Question 1

Regarding employee stock options, it is common practice to set the exercise price equal to what?

Answer 1

The market price on the date of the grant

Question 2

Important events in the life of a stock option

Answer 2

Grant Date

Vesting Date (now permitted to exercise)

Exercise (if ever)

Expiration date

Question 3

Where does translated foreign subsidiary financials go?

Answer 3

Accumulated Other Comprehensive Income, on the Balance Sheet

Question 4

AOCI

Answer 4

Accumulated Other Comprehensive Income

Question 5

Accumulated Other Comprehensive Income

Answer 5

contains the cumulative sum of all adjustments (positive and negative) made over the years

Question 6

Effective Tax rate definition

Answer 6

Tax Expense / Pretax Income

Question 7

Extraordinary items

Answer 7

revenue and expenses that are both unusual and infrequent

Question 8

pro forma

Answer 8

assumptions were used to derive whatever number is being discussed