Find Microsoft’s financial statement note concerning “employee stock and savings plans.”
a. Briefly describe Microsoft’s employee stock purchase plan.
b. Microsoft also has an employee stock option plan whereby certain key employees are granted incentive stock options that allow them to buy Microsoft stock at a fixed price in the future. If Microsoft’s stock price continues to rise, these options could be very valuable. Microsoft is not required to report any expense associated with the granting of these options. However, Microsoft is required to estimate the value of these options and disclose what net income would have been if this value had been recognized as an expense. How much would Microsoft’s 1999 net income have decreased if the value of the incentive stock options had been recognized as an expense?