Under Its Executive Stock Option Plan,N Corporation Granted Options on January

question 7

Multiple Choice

Under its executive stock option plan,N Corporation granted options on January 1,2016,that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years,but not before December 31,2018 (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 are anticipated.Ignoring taxes,what is the effect on earnings in the year after the options are granted to executives?

• A)$ 0.
• B)$20 million.
• C)$60 million.
• D)$90 million.

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Definitions:

Biological Factors

Components and influences stemming from the biological level, such as genetics, neurochemical imbalances, and brain structure, affecting an individual's health and behavior.

Social Factors

External societal influences that affect an individual's behavior, attitudes, and life chances.

Incentive

A factor, often a reward or punishment, that motivates behavior or increases the likelihood of a certain response.

Biological Needs

Biological needs are the essential requirements that organisms must meet to maintain life, such as food, water, air, and shelter.