ter 19 Quiz Help Saved Save & Exit 2018, M Company granted 95,000 stock options

Question

ter 19 Quiz Help Saved Save & Exit 2018, M Company granted 95,000 stock options to certain executives. The options are On January 1, exercisable no sooner than December to acquire one share of $1 par common stock for options to be $3 on the date of grant 1, 2020, and expire on January 1, 2024. Each option can be exercised $10. An option-pricing model estimates the fair value of the If unexpected turnover in 2019 c aused the company to estimate that 20% of the options would be forfeited. mount should M recognize as compensation expense for 2019? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Multiple Choice $31,667 ?Prev 3 of 121 Next > earch ENG

Explanation / Answer

M Company Stock Option $ 95,000.00 Fair Value of options $            3.00 Expirtion period of option(1st Jan 2021 to 31 Dec 2023) 3 Years Compensation Expense for 2018=(95000*$3)/3 $ 95,000.00 Compensation Expense for 2019 ($95000*3)=$285000*80%=$228000*2/3=$152000-$95000 $ 57,000.00

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