Use the Following Information for Questions 74-76

question 20

Multiple Choice

Use the following information for questions 74-76.
On January 1, 2019, Luanda Ltd. established a stock appreciation rights plan for its executives. This plan entitles them to receive cash at any time during the next four years for the difference between the market price of its common shares and a pre-established price of $ 20, on 50,000 SARs. Market prices of the shares are as follows: Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2019.
-What amount of compensation expense should Luanda recognize for calendar 2019?

• A) $ 150,000
• B) $ 187,500
• C) $ 225,000
• D) $ 900,000

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Definitions:

Middle East

A transcontinental region centered on Western Asia and Egypt, known for its historical and strategic significance.

Western Europe

A region comprising countries located in the western part of the European continent, often associated with developed economies and democratic governance.

Disposable Income

Income remaining after deduction of taxes and social security charges, available to be spent or saved as one wishes.

APC

Average Propensity to Consume, which measures the fraction of income that households spend on consumption rather than saving.