1. Karsen Company grants options to purchase 60,000 shares of the companys $5 par value common stock. The exercise price is $22. The fair value of an option using a binomial model is $9. The option holder has to stay with the company for 2 years before exercising. 10% of the options are exercised in Year 3. Which of the following is true?

1. The company receives cash of $54,000 when the options are exercised.
2. The company issues 6000 shares of common stock with a par value of $30,000 on the grant date.
3. APIC-stock options decreases by $54,000 when the options are exercised.
4. Cash for the company decreases by $132,000 when the options are exercise