Question
Ellsworth Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company on January 1, 2018, granted 25
Ellsworth Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company on January 1, 2018, granted 25 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within four years. The common shares have a market price of $12.00 per share on the grant date. Ellsworth expected a 4% forfeiture rate on the restricted shares prior to vesting. What amount should Ellsworth charge to compensation expense for the year ended December 31, 2018?
a) $80 million b) $78 million c) $76 million d) $72 million
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