Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2024, Black Incorporated issued stock options for 260,000 shares to a division manager. The options have an estimated fair value of $7
On January 1, 2024, Black Incorporated issued stock options for 260,000 shares to a division manager. The options have an estimated fair value of $7 each. To orovide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 4% in four years. Black initially estimates that it is probable the goal will be achieved. In 2025 , after one year, Black estimates that it is not probable that divisional revenue will increase by 4% in our years. Ignoring taxes, what is the effect on earnings in 2025 ? Multiple Choice $455,000 decrease $227,500 increase $455,000 increase No effect
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started