Question
Use the following information to answer the next two questions. On 1/1/22, a company grants 1,000,000 stock options to its employees. The par value of
Use the following information to answer the next two questions.
On 1/1/22, a company grants 1,000,000 stock options to its employees. The par value of the shares is $1/share and the exercise price is the current stock price of $24/share. The options vest over three years and are valued at $9/option. The company reports annually on a calendar year basis.
a) What is the compensation expense from the stock options for the year 2022 if the shares are trading at $26/share on 12/31/22?
b) What is the compensation expense from the stock options for the year 2022 if the shares are trading at $20/share on 12/31/22?
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Managerial Accounting An Integrative Approach
Authors: C J Mcnair Connoly, Kenneth Merchant
2nd Edition
099950049X, 978-0999500491
