Compensation expense relative to the options

Reference no: EM13127246

Gregory's on Ormond, Inc. grants its president 2,000 stock options on January 1, year 1 that gives him rights to purchase shares of the company for $40 per share on December 31,year 2. At the time the options were granted, fair value of the options totaled $20,000. At December 31, year 1 the company's stock sold for $45 per share and at December 31, year 1 the selling price of the stock was $55 per share. On December 31, year 2, the president resigned from the company did not elect to exercise the options. In its year 2 financial statements, Gregory's on Ormond would recognize compensation expense relative to the options of how much?

a) (10000)

b) 0

c) 10000

d) 15000

Reference no: EM13127246

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