Hoho company has an ESPP which allows all employees to buy its $1 par common...
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Hoho company has an ESPP which allows all employees to buy its $1 par common shares directly from the company during the last month of each quarter of the year at a 3% discount. On December 1, 20X1, Hoho fixed the purchase price based on the current market value on the 3rd day of March ($10), June ($8), September ($9) and December ($9.50). During each of March, June, September and December of 20X1, employees purchased 25,000 shares for a total of 100,000 shares under the plan.
What would be compensation expense be for 20X1 related to Hoho's ESPP? (Round your answer to the nearest dollar and do not use commas or dollar signs in your answer.)
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