On January 1, 20x1, Charlotte, Inc. entity grants 100 share options to each of its 500 employees. Each grant is conditional upon the employee working for the entity over the next three (3) years. The entity estimates that the fair valu
On January 1, 20x1, Charlotte, Inc. entity grants 100 share options to each of its 500 employees. Each grant is conditional upon the employee working for the entity over the next three (3) years. The entity estimates that the fair valu
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
On January 1, 20x1, Charlotte, Inc. entity grants 100 share options to each of its 500 employees. Each grant is conditional upon the employee working for the entity over the next three (3) years. The entity estimates that the fair value of the share option is P24. On the basis of a weighted average probability, the entity estimates that 20% of employees will leave during the three (3) year period and therefore forfeit their rights to the share options.
REQUIRED:
If everything turns out exactly as expected, compute the following:
- Salaries expense for 20x1
- Salaries expense for 20x2
- Salaries expense for 20x3
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