Exhibit 16-6 on January 1, 2010, 50 Executives Were Given

question 77

Multiple Choice

Exhibit 16-6 On January 1, 2010, 50 executives were given a performance-based stock option plan that would award them with a maximum of 200 shares of $10 par common stock for $20 a share.On the grant date, the fair value of an option was $16.50.The number of options that will vest depends on the size of the annual average increase in sales over the next three years according to the following table:
$\begin{array}{llr}\text { Anmual Average Increase in Sales }&\text { No. of Shares }\\ \text { Greater than \( 5 \% \) } &50\\ \text {Greater than \( 10 \% \) } &100\\ \text {Greater than \( 150 \% \) } &200\end{array}$
On the grant date, the company estimates the annual average sales increase will be 12%.
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Refer to Exhibit 16-6.The estimated total compensation cost will be

• A)$ 55, 000
• B)$ 82, 500
• C)$ 27, 500
• D)$165, 000

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