Compute the amount of compensation expense

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Question - Under its executive stock option plan, National Corporation granted 15 million options on January 1, 2018, that permit executives to purchase 15 million of the company's $1 par common shares within the next six 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, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that unexpected turnover during 2019 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2019 and 2020.

Reference no: EM132684708

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