Victor, Inc. awarded 2,000 stock options to buy 2,000 common shares ($1 par) at an exercise price of $40 per share when the market price is $40 per share. The fair value of the options at the time of the award is equal to $100,000. The service period is 4 years. No forfeiture occurs and all options are exercised at the end of the service period. After the exercise of the options, total stockholder's equity (TSE) will change by the following amount: O TSE will increase by $80,000 Total. O TSE will increase by $100,000 Total. O TSE will increase by $180,000. O TSE will have a net $-0- change.
Victor, Inc. awarded 2,000 stock options to buy 2,000 common shares ($1 par) at an exercise price of $40 per share when the market price is $40 per share. The fair value of the options at the time of the award is equal to $100,000. The service period is 4 years. No forfeiture occurs and all options are exercised at the end of the service period. After the exercise of the options, total stockholder's equity (TSE) will change by the following amount: O TSE will increase by $80,000 Total. O TSE will increase by $100,000 Total. O TSE will increase by $180,000. O TSE will have a net $-0- change.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Victor, Inc. awarded 2,000 stock options to buy 2,000 common shares ($1 par) at an exercise price of $40 per share when the market price is $40 per share. The fair value of the options at the time of the award is equal to $100,000. The service period is 4 years. No forfeiture occurs and all options are exercised at the end of the service period. After the exercise of the options, total
O TSE will increase by $80,000 Total.
O TSE will increase by $100,000 Total.
O TSE will increase by $180,000.
O TSE will have a net $-0- change.
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