Under Its Executive Stock Option Plan, M Corporation Granted Options

question 73

Multiple Choice

Under its executive stock option plan, M Corporation granted options on January 1, 2018, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years, but not before December 31, 2020 (the vesting date) . The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures were anticipated; however, unexpected turnover during 2019 caused the forfeiture of 5% of the stock options. Ignoring taxes, what is the effect on earnings in 2019?

• A) $18.5 million.
• B) $18 million.
• C) $20 million.
• D) $19 million.

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Workforce Planning

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Labour Market Data

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