Lance Chips Granted Restricted Stock Units (RSUs) Representing 40 Million

question 190

Multiple Choice

Lance Chips granted restricted stock units (RSUs) representing 40 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $5 per share on the grant date. The total compensation cost pertaining to the restricted stock units is:

• A) $5 million.
• B) $40 million.
• C) $50 million.
• D) $200 million.

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