Green Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2013, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Assuming Green uses the straight-line method, what is the compensation expense related to the options to be recorded in 2014?
A)$130,667.
B)$200,000.
C)$333,333.
D)$400,000.

Question

Green Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2013, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows:  Assuming Green uses the straight-line method, what is the compensation expense related to the options to be recorded in 2014?
A)$130,667. 
B)$200,000. 
C)$333,333. 
D)$400,000.

Quizplus · Accepted Answer

The Answer of Green Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2013, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows:  Assuming Green uses the straight-line method, what is the compensation expense related to the options to be recorded in 2014?
A)$130,667. 
B)$200,000. 
C)$333,333. 
D)$400,000.

Green Company Is a Calendar-Year U