Green Company Is a Calendar-Year U

question 29

Multiple Choice

Green Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2013, 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: Assuming Green uses the straight-line method, what is the compensation expense related to the options to be recorded in 2014?

• A)$130,667.
• B)$200,000.
• C)$333,333.
• D)$400,000.

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Definitions:

Term

A specified period of time during which certain conditions or agreements apply, or the definition of a concept or expression in specific contexts.