A corporation has a stock option plan it awards to its executives. On January 1, Year 5, the board of directors granted 12,000 stock options, each of which permits the purchase of one share of stock at $15 per share, the current market price of the stock. The options are exercisable 4 years later on December 31, Year 8, as long as the executives are still employed. The options expire on December 31, Year 10. The fair value of each option on the grant date is $7. What is the compensation expense for Year 5 related to the stock options? O $60,000. O $45,000. O $21.000. O $28,000.

A corporation has a stock option plan it awards to its executives. On January 1, Year 5, the board of directors granted 12,000 stock options, each of which permits the purchase of one share of stock at $15 per share, the current market price of the stock. The options are exercisable 4 years later on December 31, Year 8, as long as the executives are still employed. The options expire on December 31, Year 10. The fair value of each option on the grant date is $7. What is the compensation expense for Year 5 related to the stock options? O $60,000. O $45,000. O $21.000. O $28,000.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 30P

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