In order to retain certain key executives, Waterway Industries granted them incentive stock options on December 31, 2020. 144000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2021 December 31, 2022 $46 per share O $2627000. O $1502000. O $1652000. O $751000. 51 per share The options were granted as compensation for executives' services to be rendered over a two-year period beginning January 1, 2021. The Black-Scholes option pricing model determines total compensation expense to be $1502000. What amount of compensation expense should Waterway recognize as a result of this plan for the year ended December 31, 2021 under the fair value method?
In order to retain certain key executives, Waterway Industries granted them incentive stock options on December 31, 2020. 144000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2021 December 31, 2022 $46 per share O $2627000. O $1502000. O $1652000. O $751000. 51 per share The options were granted as compensation for executives' services to be rendered over a two-year period beginning January 1, 2021. The Black-Scholes option pricing model determines total compensation expense to be $1502000. What amount of compensation expense should Waterway recognize as a result of this plan for the year ended December 31, 2021 under the fair value method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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