1. TPE Inc. developed a business strategy that used stock options as a major compensation incentive for its top executives. On 1/1/18, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date$10 per share. Options vest on 1/1/20. They cannot be exercised before that date and will expire on 12/31/23. The fair value of the 20 million options, estimated by an appropriate option-pricing model, is $40 per option. TPE's compensation expense in 2018 for these stock options was:

A. $0

B. $400 million

C. $800 million

D. $1,000 million