Multiple Choice
On January 1,2016,Red Inc.issued stock options for 200,000 shares to a division manager.The options have an estimated fair value of $6 each.To provide additional incentive for managerial achievement,the options are not exercisable unless divisional revenue increases by 6% in three years.Red initially estimates that it is probable the goal will be achieved.Ignoring taxes,what is compensation expense for 2016?
A) $ 0.
B) $ 200,000.
C) $ 400,000.
D) $1,200,000.
Correct Answer:
Verified
Correct Answer:
Verified
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