TOPIC 3 - SHARE-BASED PAYMENTS Question 33 Hot yet nswered Marked out of .00 Roma Ltd grants 1000 share appreciation rights (SARs) to 16 senior managers, to be taken in cash within 2 years of vesting date on condition that the managers do not leave in the next 3 years. The SARS vest at the end of year 3. Roma Ltd estimates the fair value of the SARs at the end of each year in which a liability exists as shown below. The intrinsic value of the SARs at the date of exercise at the end of year 3 is also shown. Flag question Year Fair value Intrinsic value Actual departures Number of Estimated managers future who departures exercised their SARS 1 3 $9 $9 2 1 1. 1 2 3 $19 $16 2 Calculate the expense relating to the share appreciation rights at the end of year 3. PLEASE ENTER YOUR ANSWER IN WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS (EG $1,000,000 SHOULD BE SHOWN AS 1000000). Answer: TOPIC 3 - SHARE-BASED PAYMENTS Question 33 Hot yet nswered Marked out of .00 Roma Ltd grants 1000 share appreciation rights (SARs) to 16 senior managers, to be taken in cash within 2 years of vesting date on condition that the managers do not leave in the next 3 years. The SARS vest at the end of year 3. Roma Ltd estimates the fair value of the SARs at the end of each year in which a liability exists as shown below. The intrinsic value of the SARs at the date of exercise at the end of year 3 is also shown. Flag question Year Fair value Intrinsic value Actual departures Number of Estimated managers future who departures exercised their SARS 1 3 $9 $9 2 1 1. 1 2 3 $19 $16 2 Calculate the expense relating to the share appreciation rights at the end of year 3. PLEASE ENTER YOUR ANSWER IN WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS (EG $1,000,000 SHOULD BE SHOWN AS 1000000)