On January 1, 2021, M Company granted 95,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2023, and expire on January 1, 2027. Each option can be exercised to acquire one share of $1 par common stock for $11. An option-pricing model estimates the fair value of the options to be $4 on the date of grant.
If unexpected turnover in 2022 caused the company to estimate that 20% of the options would be forfeited, what amount should M recognize as compensation expense for 2022? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)
a. $31,667
b. $47,500
c. $76,000
d. $126,667
Answers: 3
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On January 1, 2021, M Company granted 95,000 stock options to certain executives. The options are ex...
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