At January 1, Year 1, Edwards Company issued 10,000 stock options permitting employees to buy 10,000 shares of stock for $50 per share. The vesting schedule (graded-vesting) and value of the options that vest over the 3-year period is estimated at January 1, Year 1, as set forth in the following table.

What is the compensation cost for Year 1 relating to these stock options?

Vesting Date Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Amount Vesting 10% 30% 60 % Fair Value per Option S 2 S 3 S 4