On January 1, Year 1, Axis Corporation Granted Employees 48,000

question 84

Multiple Choice

On January 1, Year 1, Axis Corporation granted employees 48,000 stock options for 48,000 shares of $2 par value common stock. The exercise price on the date of issue was equal to the market price of $23. There is a two-year vesting period and the options expire in four years. Employees have the right to sell back the shares to the corporation within six months of exercise. The fair value of the options has been estimated to be $31 per option and the company does not expect any forfeitures of the options. What is the amount of compensation expense for Year 1?

• A) $744,000
• B) $0
• C) $1,488,000
• D) $1,104,000

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Definitions:

Transmitted

The process by which information, traits, diseases, or energy is passed or conveyed from one entity or location to another.

Phenotype

Phenotype refers to the observable physical and physiological traits of an organism, determined by its genetic makeup and environmental influences.

Genotype

The genetic makeup of an individual, consisting of all the DNA sequences that determine hereditary traits.

Biological Inheritance

The process by which genetic information is transmitted from parents to offspring, determining various aspects of the offspring's characteristics.