Under Its Executive Stock Option Plan, Z Corporation Granted Options

Under its executive stock option plan, Z Corporation granted options on January 1, 2018, 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, 2020 (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. The options expired in 2024 without being exercised. By what amount will Z's shareholder's equity be increased?

A) $60 million.
B) $270 million.
C) $315 million.
D) $330 million.

Correct Answer:

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