On January 1, Year 1, Korsak Company issued 100,000 stock-appreciation rights (SARs) to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $20. The fair value of SARs on grant date is $15. The service period is 2 years, and the SARs would expire after Year 7. Assume the officers exercise their rights on January 1, Year 5 when the stock is trading at $40. Given the SARs are settled with cash, total compensation expense over the life of the SARS is: [ Select ] Now assume these SARs entitled the officers to receive shares rather than cash for the difference between the market price of its stock and a pre-established price of $20. Given the SARs are settled with equity, total compensation expense over the life of the SARS is: V[ Select tt $4,000,000 $1,500,000 None of the above