1. X grants 100,000 options to employees having a fair value of S6/option, exercisable in 2 years year at $10. The options will vest depending on the 1) number of employees remaining, and 2) only if X achieves a specified revenue target for the year. Half the employees quit before vesting, but the revenue target is achieved. a. Regarding the compensation expense over the entire two years: How much is recognized? Why? (9 pts) b. All employees remain for the two years, the revenue target is achieved, but the stock price is $9 on the vesting date. Regarding the compensation expense over the two years: How much is recognized? Why? c. Half the employees quit before vesting, but the revenue target is not achieved. What is the compensation expense over the two years: How much is recognized? Why? 2. Discuss the impact on the balance sheet, income statement, and statement of cash flow when a securitization is recorded as a sale vs. a secured borrowing (4pts)