Kaijsa Received 20 NQOs (Each Option Gives Her the Right

Essay

Kaijsa received 20 NQOs (each option gives her the right to purchase 32 shares of stock for $8 per share)from her employer at the time she started working, when the stock price was $11 per share. Now that the share price is $18 per share, she intends to exercise all of her options. If Kaijsa holds the shares for two years and sells them when the market price is $25, what is the amount of the deduction and tax savings her employer will receive (assume the employer's marginal tax rate is 21 percent)?