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On January 1, 2006, Baltimore Ravens granted 30,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2008, and expire

On January 1, 2006, Baltimore Ravens granted 30,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2008, and expire on January 1, 2011. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. The market price of Raven's stock was as follows:

January 1, 2006

$14

December 31, 2006

15

What amount should the Raven's recognize as compensation expense for 2006?

Question 12 options:

A)

$10,000

B)

$20,000

C)

$30,000

D)

$50,000

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