Question
Maxon Inc. developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2013, 30 million
Maxon Inc. developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2013, 30 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date$10 per share. Options vest on January 1, 2017. They cannot be exercised before that date and will expire on December 31, 2019. The fair value of the 30 million options, estimated by an appropriate option pricing model, is $41 per option. Ignore income tax. |
Maxon's compensation expense in 2013 for these stock options was: (Round your answer to nearest whole dollar amount.) |
$0.
$1,230 million.
$615 million.
$308 million.
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