What is the effect on earnings for JudyCorp

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Problem 1: Under its executive stock option plan, JudyCorp granted options on January 1, 2021, that permit executives to purchase 16 million of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No forfeitures were anticipated; however, unexpected turnover during 2022 caused the forfeiture of 8% of the stock options. Ignoring taxes, what is the effect on earnings in 2022? (Round your answer to the nearest dollar amount.)

Option 1: $22 million.
Option 2: $28 million.
Option 3: $29 million.
Option 4: $24.0 million.

Reference no: EM132718258

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