Question

1. You have been granted options for 25,000 shares with an exercise price of $10 per share. If in the future you are fully vested, and if you cashed out your options for what they are worth on a net basis, what total net value did you receive if the stock price was $30 per share?

___________

2. All of the following are advantages of raising equity through a private placement rather than through a public offering except:
   1. The issuer does not have to comply with the anti-fraud provisions of the securities laws
   2. The issuer does not have to file with the SEC
   3. Typically has a lower issuance cost than a public offering
   4. Typically can be a quicker process than a public offering

Answer 1

1. You'll receive $30 per share if you want to vest your options and come out selling your position so overall amount of money you'll get in totality is

=25000×$30

= $750000

These shares are for $30 on net basis.

2. All of the following are advantages of raising equity through a private placement rather than through a public offering except

A.The issuer does not have to comply with the anti-fraud provisions of the securities laws.This statement is completely wrong as he will have to comply with anti fraud provision

While rest of statements are true as he'll not have to file to SEC and issuance cost is low in private placements.It is also a quicker process.