What is effect on earnings in the year

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Reference no: EM13130048

Doe corp. granted executive stock options on Jan1,2011, that permit exec's to purchase 14 million of the companies $1 par common shares within the next 8 years, but not before the vesting date of Dec.31 2013. 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. No forfeitures are anticipated, ignoring taxes, what is the effect on earnings in the year after the options are granted to executives?

Reference no: EM13130048

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