On January 1, Year 1, Fields Corporation Granted 200,000 Stock

question 14

Multiple Choice

On January 1, Year 1, Fields Corporation granted 200,000 stock options to certain executives. The vesting period is 3 years. The options are exercisable no sooner than December 31, Year 3 and expire on January 1, Year 7. Each option can be exercised to acquire one share of $10 par common stock for $15. An appropriate option-pricing model estimates the fair value of each option to be $11 on the date of grant. Fields chooses to adjust the fair value of the options for the estimated forfeitures. If unexpected turnover in Year 2 caused Fields to estimate that 12% of the options would be forfeited, what amount of compensation expense should Fields recognize in Year 2? (Round intermediate calculations and your final answer to the nearest dollar.)

• A) $0
• B) $1,290,667
• C) $733,333
• D) $557,334

---

Definitions:

Enhancement Role

Refers to activities or positions that contribute to improving or augmenting the performance, status, or condition of something or someone.

Direct Practice

The application of social work theories and methods to help individuals, families, and groups directly.

Evolution

The gradual development or change of something over a period of time, often seen in biological contexts.

Group Work

Collaborative efforts where individuals come together to achieve a common goal, often used in educational and therapeutic settings.