On December 31, 2015, in Order to Retain Certain Key

question 10

Multiple Choice

On December 31, 2015, in order to retain certain key executives, Entebbe Corporation granted them stock options.25,000 options were granted at an option price of $40 per share.Market prices of the shares were as follows: The options were granted as compensation for services to be rendered over a two-year period beginning January 1, 2016.The Black-Scholes option pricing model determined total compensation expense to be $500,000.The amount of compensation expense Entebbe should have recorded for calendar 2017 is

• A)$250,000.
• B)$500,000.
• C)$875,000.
• D)$1,000,000.

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Definitions:

Stakeholder Responsibility

Involves the obligations and duties that an organization has towards its stakeholders, including customers, employees, investors, and the wider community, to act ethically and contribute to well-being.

Profit Responsibility

The obligation or duty of a company to maximize profits for its shareholders or owners, while maintaining ethical practices.

Mass Marketing

A marketing strategy that aims to reach a wide audience through broad communication channels and generic messages.

Corn-Based Resins

Bioplastic materials derived from corn starch, used as an environmentally friendly alternative to petroleum-based plastics for various applications.