Red Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2018, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting) . The fair value of the options is estimated as follows: 
What is the compensation expense related to the options to be recorded in 2019?
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REM Sleep
A stage of sleep characterized by rapid eye movements, vivid dreaming, and increased brain activity.
Higher Mammals
Mammals that have a more complex brain structure, including primates, cetaceans, and humans, often characterized by advanced cognitive abilities and social behaviors.
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Sigmund Freud
A neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.
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