Question
On January 1, Year 1, Davenport Corporation granted an employee an option to purchase 10 comma 000 of Davenport's $10 par common stock at $30
On January 1, Year 1, Davenport Corporation granted an employee an option to purchase 10 comma 000 of Davenport's $10 par common stock at $30 per share. The options became exercisable on December 31, Year 3, after the employee completed three years of service. The option was exercised on February 1, Year 4. The market prices of Davenport's stock were as follows: January 1, Year 1, $40; December 31, Year 3, $60; and February 1, Year 4, $55. An options pricing model estimated the value of the options at $ 20 each on the grant date. For Year 1, Davenport should recognize compensation expense of ________. (Do not round intermediary calculations. Only round your final answer to the nearest dollar.)
A. $ 200,000
B. $ 100,000
C. $ 66,667
D. $0
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