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Wilson's compensation expense in 2021 for these stock options was:     $800 million.     $200 million.     $400 million.     $0.

Wilson's compensation expense in 2021 for these stock options was:     $800 million.     $200 million.     $400 million.     $0.

FINANCIAL ACCOUNTING
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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Wilson Inc. developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2021, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date—$10 per share. Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $40 per option. Ignore income tax.

Wilson's compensation expense in 2021 for these stock options was:
   
$800 million.
   
$200 million.
   
$400 million.
   
$0.
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