Question
Zafar Zeng Catering granted stock options on February 1, 2020, that permit its senior management to purchase 32 million of Zafar Zeng's $1 par common
Zafar Zeng Catering granted stock options on February 1, 2020, that permit its senior management to purchase 32 million of Zafar Zeng's $1 par common shares within the next ten years, but not before January 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $20 per share. The fair value of the options on the date of grant is $6 per option. No forfeitures are anticipated. The options are exercised on March 1, 2025, when the market price is $23 per share. When the options are exercised, what will be the impact on Zafar Zeng's shareholder's equity?
a) 800 million b) 640 million c) 192 million d 832 million
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started