A company has granted 500,000 options to its executives. The stock price and strike price are both $40. The options last for 12 years and vest after four years. The company decides to value the options using an expected life of five years and a volatility of 30% per annum. The company pays no dividends and the risk-free rate is 4%. What will the company report as an expense for the options on its income statement? 1) $6.729,362.80 2) $6,972,362.80 3) $6.792.263.80 4) $6,792,362.80