Ram grants to employees the option to buy shares of stock at $5 per share. A total of 100,000 shares are in the option grant. The service period is 3 years. The option pricing model sets the value of each option at $5.40 on the grant date while the stock market price on the grant date is $6.00. At the end of the first year, how much compensation expense should be recorded? (Lesson 13.2) 4 O a. $200,000 Ob. $180,000 O c. $500,000 O d. $540,000

Ram grants to employees the option to buy shares of stock at $5 per share. A total of 100,000 shares are in the option grant The service period is 3 years The opton pricing model sets the value of each option at $5.40 on the grant dato while the stock market price on the grant date is $600 At the end of the first year, how much compensation expense should be recorded? (Lesson 13.2) a. $200.000 b. $180,000 C. $500,000 d. $540,000