Business Case Studies & Business Publications

Microsoft and the Tax Reform Act of 1986

Frank, Mary Margar...

Case

Microsoft and the Tax Reform Act of 1986

Frank, Mary Margaret; Gupta, Vishal

C-2186 | Published July 30, 2004 | 13 pages Case

Collection: Darden School of Business

Product Details

Students analyze an employer and an employee's preferences for nonqualified stock options versus incentive stock options. Employer Microsoft issued large amounts of incentive stock options prior to its initial public offering (IPO), which occurred shortly before the Tax Reform Act of 1986 dramatically changed tax rates.