Question
On December 31, Year 17, Vaughn Manufacturing granted some of its executives options to purchase 173000 shares of the company s $10 par common stock
"On December 31, Year 17, Vaughn Manufacturing granted some of its executives options to purchase 173000 shares of the company s $10 par common stock at an option price of $50 per share. The Black-Scholes option pricing model determines total compensation expense to be $1346100. The options become exercisable on January 1, Year 18, and represent compensation for executives services over a three-year period beginning January 1, Year 18. At December 31, Year 18 none of the executives had exercised their options. What is the impact on Vaughn s net income for the year ended December 31, Year 18 as a result of this transaction under the fair value method?"
$ 448700 decrease. | ||
$ 448700 increase. | ||
$1346100 decrease. | ||
$0.00 |
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