In order to retain certain key executives, Smiley Corporation granted them incentive stock options on December 31, 2017. 150,000 options were granted at an option price of $35 per share. Market prices of the stock were as follows:

December 31, 2018	$46 per share
December 31, 2019	51 per share

The options were granted as compensation for executives services to be rendered over a two-year period beginning January 1, 2018. The Black-Scholes option pricing model determines total compensation expense to be $1,500,000. What amount of compensation expense should Smiley recognize as a result of this plan for the year ended December 31, 2018 under the fair value method?

A.

$1,650,000.

B.

$ 750,000.

C.

$1,500,000.

D.

$2,625,000.

In order to retain certain key executives, Smiley Corporation granted them incentive stock options on December 31, 2017. 150,000 options were granted at an option price of $35 per share. Market prices of the stock were as follows:

December 31, 2018	$46 per share
December 31, 2019	51 per share

The options were granted as compensation for executives services to be rendered over a two-year period beginning January 1, 2018. The Black-Scholes option pricing model determines total compensation expense to be $1,500,000. What amount of compensation expense should Smiley recognize as a result of this plan for the year ended December 31, 2018 under the fair value method?

A.

$1,650,000.

B.

$ 750,000.

C.

$1,500,000.

D.

$2,625,000.

In order to retain certain key executives, Smiley Corporation granted them incentive stock options on December 31, 2017. 150,000 options were granted at an option price of $35 per share. Market prices of the stock were as follows:

December 31, 2018	$46 per share
December 31, 2019	51 per share

The options were granted as compensation for executives services to be rendered over a two-year period beginning January 1, 2018. The Black-Scholes option pricing model determines total compensation expense to be $1,500,000. What amount of compensation expense should Smiley recognize as a result of this plan for the year ended December 31, 2018 under the fair value method?

	A.	$1,650,000.
	B.	$ 750,000.
	C.	$1,500,000.
	D.	$2,625,000.