Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. under its executive stock option plan, national co

Under its executive stock option plan, National Corporation granted 12 million options on January 1,...

70.2K

Verified Solution

Question

Accounting

image

Under its executive stock option plan, National Corporation granted 12 million options on January 1, 2021, that permit executives to purchase 12 million of the company's $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No forfeitures are anticipated. 1. Ignoring taxes, what is the total compensation cost pertaining to the stock options? 2. Ignoring taxes, what is the effect on earnings in the year after the options are granted to executives? (For all requirements, enter your answer in millions (i.e., 10,000,000 should be entered as 10).) 1. million Total compensation cost Effect on earnings 2. million

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

(a) Estimate the area under the graph of f(x) = 4 cos(x) from x = 0...

Basic Math
Q

Q1 what is the definition of knapsack problem ? Q2 what is the main difference between salesman...

Advance Math
Q

Heidi Birmingham and James T. Roberts have decided to create a business. They have financing available...

Accounting
Q

African bush elephants have a lifespan of 60 to 70 years They typically only have...

Biology
Q

571 To illustrate, the direct materials quantity variance for Cowpoke Inc. is computed as Chapter...

Accounting
Q

Mary Jones, Bob Smith, and Harry Lyke form JSL Corporation in 20X1. Peter Salsa ...

Accounting
Q

Generally accepted government auditing standards (GAGAS) apply to all of the following audits except: Multiple...

Accounting
Q

Recording Social Security Taxes Payable would be an example of a(n): A. deferred...

Accounting
Q

A man has a simple discount note for $6400, at an ordinary bank discount rate...

Accounting
Q

Use the following information to answer the question: Cash Receipts Cash Payments January $80,000 $60,000...

Accounting
Q

You have just landed a consulting position with Hawkesworth Inc. Your first task is to...

Finance
Q

1.) Anderson Corporation has purchased a group of assets for $ 20 comma 500$20,500. The...

Accounting