***PLEASE ANSWER ALL QUESTIONS***

1. Under its executive stock option plan, C Corporation granted options on January 1, 2021, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. The options are exercised on April 2, 2024, when the market price is $21 per share. By what amount will Cs shareholders' equity be increased when the options are exercised?

A) $60 million.

B) $270 million.

C) $315 million.

D) $330 million.

2. On January 1, 2021, E Corp. granted an employee an option to purchase 8,000 shares of E's $5 par common stock at $20 per share. The options became exercisable on December 31, 2022, after the employee completed two years of service. The option was exercised on January 10, 2023. The market prices of E's stock were as follows: January 1, 2021, $30; December 31, 2022, $50; and January 10, 2023, $45. An option pricing model estimated the value of the options at $8 each on the grant date. For 2021, E should recognize compensation expense of:

A) $0.

B) $24,000.

C) $32,000.

D) $64,000.

3. Wise Inc. developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2021, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date$30 per share ($150 per option). Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $40 per option. Ignore income tax.

Wise's compensation expense in 2021 for these stock options was

A) $0.

B) $200 million.

C) $400 million.

D) $800 million.