Taxon Corp. granted stock options representing the right to purchase 30 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the options satisfy the vesting requirement, the company will allow executives to trade those options. The options had a market price of $8 per share on the grant date. Currently (as of the reporting date) the market price of the options are $24 per share. Ignoring taxes, what is the effect on earnings in the year that the shares are granted to executives? A) $0. B) $30 million. C) $80 million. D) $240 million. O A O B O D

Taxon Corp. granted stock options representing the right to purchase 30 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the options satisfy the vesting requirement, the company will allow executives to trade those options. The options had a market price of $8 per share on the grant date. Currently (as of the reporting date) the market price of the options are $24 per share. Ignoring taxes, what is the effect on earnings in the year that the shares are granted to executives? A) $0. B) $30 million. C) $80 million. D) $240 million. O A O B O D

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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