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How much compensation expense should they recognize

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Question - SMR Corp. granted 226,000 stock options to employees on 12/31/2019 as compensation over the next 3 years. The options had a strike price of $74 per share and market prices of $89 on 12/31/2020 and $85 on 12/31/2021. If they originally estimated the original fair value to be $2,260,000, how much compensation expense should they recognize on 12/31/2021, assuming that the options can only be used to purchase stock?

a. $3,390,000

b. $904,000

c. $2,486,000

d. $753,333

Reference no: EM133067873

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