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Company A granted 10 million options on January 1, 2021, that permit executives to purchase 10 million of the company's $1 par common shares
Company A granted 10 million options on January 1, 2021, that permit executives to purchase 10 million of the company's $1 par common shares within the next 8 years, but not before December 31, 2024 (the vesting date) under the company's executive stock option plan. The exercise price is the market price of the shares on the date of the grant, $9 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Suppose that unexpected turnover during 2022 caused the forfeiture of 2% of the stock options. What amount of compensation expense will be recorded in 2022 and 2023? Company A will record $12.5 million ofcompensation expense in both 2022 and 2023 Company A will record $12 million and $12.25 million of compensation expense in 2022 and 2023, respectively. Company A will record $9.6 million and $9.8 million of compensation expense in 2022 and 2023, respectively. Company A will record $22.5 million of compensation expense in both 2022 and 2023 o lo
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