Walker, Incorporated Walker, Incorporated Uses Stock Options as a Compensation Incentive for Incentive

question 135

Essay

Walker, Incorporated
Walker, Incorporated uses stock options as a compensation incentive for its top executives. On January 1, Year 1, 25,000 options were granted, each giving the holder the right to acquire one $5 par common share. The exercise price is $60 per share. The vesting period is 4 years. Options vest on January 1, Year 5 and cannot be exercised before that date and will expire on December 31, Year 8. The fair value of the 25,000 options, estimated by an appropriate option pricing model is $50 per option.
-Refer to Walker Corporation. On April 1, Year 7, when the market price of Walker's stock was $20 per share, 15,000 of the options were exercised. Make the appropriate journal entry to record this transaction.

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Definitions:

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Promotion Committee

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Politicking Strategy

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The process of assembling a group of stakeholders or organizations to achieve a common goal or address a specific issue through collective effort.