Which of the following is true about stock-based compensation? (check all that apply)

Stock-based compensation expense must be added back in the Operating section of SCF under the indirect method because it is a noncash expense. Companies receive a tax deduction when employees exercise stock options because the employees get taxable income upon exercise. Stock-based compensation expense is never adjusted based on movements in stock price after the exercise date. Stock-based compensation expense can show up in COGS as well as Selling, General, and Administrative (SG&A) expense. The fair value of an option grant is almost always less than the strike price of the option grant.

Stock-based compensation expense must be added back in the Operating section of SCF under the indirect method because it is a noncash expense. Companies receive a tax deduction when employees exercise stock options because the employees get taxable income upon exercise. Stock-based compensation expense is never adjusted based on movements in stock price after the exercise date. Stock-based compensation expense can show up in COGS as well as Selling, General, and Administrative (SG&A) expense. The fair value of an option grant is almost always less than the strike price of the option grant.