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What amount of annual stock compensation cost should company

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Reference no: EM132773687

Problem 1: On January 1, year 1, a company grants 5,000 nonqualified stock options to an employee with a strike price of $3 per option and fair value of $8 per option. All of the options vest at the end of five years from the grant date. At the end of year 1, the company's stock price was $10 per share. What amount of annual stock compensation cost should the company report for year 1?

A. $0

B. $3,000

C. $5,000

D. $8,000

Reference no: EM132773687

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