On January 1, Year 1, Axis Corporation granted employees 85,474 stock options for 85,474 shares of $1 par value common stock. The exercise price on the date of issue was equal to the market price of $29. There is a two year vesting period and the options expire in four years. Employees have the right to sell back the shares to the corporation within six months of exercise. The fair value of the options has been estimated to be $35 per option at the grant date and the company does not expect any forfeitures of the options. At the end of year 1, the fair value of each option is $35. At the end of Year 2, the fair value of each option is $40. What is the Year 1 compensation expense? $1495795 What is the Year 2 compensation expense? $1923165 Assuming all of the options are exercised on January 1, Year 3, how much cash will Axis Corporation receive from the exercise of the options? $ Assuming all of the options are exercised on January 1, Year 3, what is the total equity value of the stock issued (i.e., how much will the Common Stock and the APIC - Common Stock accounts be credited)? $