Exhibit 16-5 on January 1, 2010, Roberto Company Adopts a Compensatory

Exhibit 16-5 On January 1, 2010, Roberto Company adopts a compensatory stock option plan and grants 40 executives 1, 000 shares each at $30 a share.The fair value per option is $7 on the grant date.The company estimates that its annual employee turnover rate during the service period of three years will be 4%.
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Refer to Exhibit 16-5.At the end of 2011, the company estimates that the employee turnover will be 5% a year for the entire service period.The compensation expense for 2011 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.)

A) $ 77, 468
B) $ 80, 022
C) $ 82, 575
D) $160, 043

Correct Answer:

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