o Verizon LTE 12:22 PM T 76% 4. Stock Compensation The Santiago Corporation provides an executive stock option plan. Under the plan, the company granted options on January 2016, that permit executives to acquire 70 million of the company'sSI par value common shares within the next eight years, but not before December 31, 2019 (the vesting date) The exercise price is the market price of the shares on the date of the grant, S27 per share. The fair value of the options, estimated by an appropriate option pricing model, is S4 per option. No forfeitures are anticipated. Ignore taxes. Required: Determine the toral compensation cost pertaining to the option........... 5. EPS Zeba Company granted 27 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. Zeba's common shares have a market price of S10 per share on January I 2015, the grant date. Required: When calculating diluted EPS at December 31, 2016, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $10 during 2016? On December 31, 2015, Jackson Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, S50 par, cumulative preferred stock outstanding On February 28, 2016, Jackson purchased 24.000 shares of common stock on the open market as treasury stock for S35 per share, Jackson sold 6.000 treasury shares on September 30, 2016, for S37 per share. Net income for 2016 was $180,905. Also outstanding during the year were fully vested incentive stock options giving key personnel the option to buy 50,000 common shares at S40. The market price ofthe common shares averaged S39 during 2016. Required Compute Jackson's basic and diluted eamings per share (rounded to 2 decimal places) for 2016