unexpected turnover during 2025 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2025 and 2026. Note: Enter your answers millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2024, that permit executives to purchase 30 million of the company's $1 par common shares within the next six years, but not before
December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $33 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Suppose that
unexpected turnover during 2025 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2025 and 2026. Note: Enter your answers in millions rounded to 2 decimal places (i.e., 5, 500,000 should be
entered as 5.50)
Transcribed Image Text:Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2024, that permit executives to purchase 30 million of the company's $1 par common shares within the next six years, but not before December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $33 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Suppose that unexpected turnover during 2025 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2025 and 2026. Note: Enter your answers in millions rounded to 2 decimal places (i.e., 5, 500,000 should be entered as 5.50)
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