Question
Under its executive stock option plan, Elbanon Corporation granted options on January 1, 2024, that permit executives to purchase 31 million of the company's $1
Under its executive stock option plan, Elbanon Corporation granted options on January 1, 2024, that permit executives to purchase 31 million of the company's $1 par common shares within the next eight years, but not before December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No forfeitures are anticipated. The options are exercised on April 2, 2027, when the market price is $22 per share. By what amount will Elbanon's shareholders' equity be increased when the options are exercised?
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