Question

Fuller Corp. has 10,000 options outstanding that allow employees to purchase each share of stock for 10. The market price of the stock is 14. What is the intrinsic value of the related options?

Answer 1

The intrinsic value of the options is $4.

Step-by-step explanation:

The intrinsic value of an option is the difference between the market price of the stock and the exercise price of the option. In this case, the exercise price is $10 and the market price is $14. Therefore, the intrinsic value of each option is $4.