Multiple Choice
Under its executive stock option plan,Q Corporation granted options on January 1,2016,that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years,but not before December 31,2018 (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 were anticipated;however,unexpected turnover during 2017 caused the forfeiture of 5% of the stock options.Ignoring taxes,what is the effect on earnings in 2018?
A) $18.5 million.
B) $18 million.
C) $19 million.
D) $20 million.
Correct Answer:
Verified
Correct Answer:
Verified
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