Brief Exercise 19-4 (Algo) Stock options; forfeiture; financial statement effects [LO19-2] Inder its executive stock option plan, National Corporation granted 30 million options on January 1, 2024, that permit executives to urchase 30 million of the company's $1 par common shares within the next six years, but not before December 31, 2026 (the vesting ate). The exercise price is the market price of the shares on the date of grant, $30 per share. The fair value of the options, estimated y an appropriate option pricing model, is $2 per option. Suppose that unexpected turnover during 2025 caused the forfeiture of 5% f the stock options. Compute the amount of compensation expense for 2025 and 2026. lote: Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50) Compensation expense ($ in millions)
Brief Exercise 19-4 (Algo) Stock options; forfeiture; financial statement effects [LO19-2] Inder its executive stock option plan, National Corporation granted 30 million options on January 1, 2024, that permit executives to urchase 30 million of the company's $1 par common shares within the next six years, but not before December 31, 2026 (the vesting ate). The exercise price is the market price of the shares on the date of grant, $30 per share. The fair value of the options, estimated y an appropriate option pricing model, is $2 per option. Suppose that unexpected turnover during 2025 caused the forfeiture of 5% f the stock options. Compute the amount of compensation expense for 2025 and 2026. lote: Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50) Compensation expense ($ in millions)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Brief Exercise 19-4 (Algo) Stock options; forfeiture; financial statement effects [LO19-2]
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2024, that permit executives to
purchase 30 million of the company's $1 par common shares within the next six years, but not before December 31, 2026 (the vesting
date). The exercise price is the market price of the shares on the date of grant, $30 per share. The fair value of the options, estimated
by an appropriate option pricing model, is $2 per option. Suppose that unexpected turnover during 2025 caused the forfeiture of 5%
of the stock options.
Compute the amount of compensation expense for 2025 and 2026.
Note: Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50)
Compensation expense
($ in millions)
2025
2026](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F232c0cd8-6c30-4d97-b387-31dd500842d0%2Fdf2d9d31-8b28-43ef-944a-a7a25f69603a%2F8q5q4ib_processed.png&w=3840&q=75)
Transcribed Image Text:Brief Exercise 19-4 (Algo) Stock options; forfeiture; financial statement effects [LO19-2]
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2024, that permit executives to
purchase 30 million of the company's $1 par common shares within the next six years, but not before December 31, 2026 (the vesting
date). The exercise price is the market price of the shares on the date of grant, $30 per share. The fair value of the options, estimated
by an appropriate option pricing model, is $2 per option. Suppose that unexpected turnover during 2025 caused the forfeiture of 5%
of the stock options.
Compute the amount of compensation expense for 2025 and 2026.
Note: Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50)
Compensation expense
($ in millions)
2025
2026
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