Compute the pretax effect of this option plan

Reference no: EM13177422

Accounting for stock options. Intel granted stock options to employees on December 31, 2007, permitting them to purchase 24.6 million shares of Intel common stock for $22.63 per share. An option-pricing model indicates that the value of each option on this date is $5.79. Intel expects to receive the benefit of enhanced employee services for the next three years. On December 31, 2012, employees exercise these options when the market price of the stock is $40 per share. Compute the pretax effect of this option plan on the net income of Intel for 2008 through 2012.

Reference no: EM13177422

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