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. $45,000. $21,000. $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. $45,000. $21,000. $28,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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.
$45,000.
O $21,000.
$28,000.
Transcribed Image Text:A company declares a cash dividend on April 15, payable on June 12 to shareholders of record on May 21. On what date is
retained earnings reduced?
O May 21.
O December 31.
June 12.
O April 15.
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