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How much compensation expense should they recognize

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Question - TFD, Inc. granted 344,000 stock options to employees on 12/31/2018 as compensation over the next 2 years. The options had a strike price of $44 per share and market prices of $53 on 12/31/2019 and $51 on 12/31/2020. If they originally estimated the original fair value to be $1,720,000, how much compensation expense should they recognize on 12/31/2020, assuming that the options can also be settled for cash?

Debit to compensation expense of $860,000

Debit to compensation expense of $2,408,000

Debit to compensation expense of $9,116,000

Debit to compensation expense of $8,600,000

Reference no: EM133064626

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