Multiple Choice
On January 1, 2015, Waddle Company adopted a compensatory stock option plan and granted its managers 10,000 options to buy shares of common stock; each option can be used to acquire a share of common stock at a price of $25 a share. The fair value of each option was $7.50 on January 1, 2015. The options can be converted into common stock after July 1, 2015. The required service period is three years.
-How much compensation expense will be recorded for the year ending December 31,2017 using the fair value approach?
A) $75,000
B) $175,000
C) $50,000
D) $25,000
Correct Answer:
Verified
Correct Answer:
Verified
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