What is the effect on earnings in year shares are granted

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Question - On January 1, 2021, a company granted 7,000 of its $1 par common shares to executives, subject to forfeiture if employment is terminated within 5 years. The common shares have a market price of $25 per share on the grant date of the restricted stock award. Ignoring taxes, what is the effect on earnings in the year the shares are granted?

a) increase in earnings of $175,000

b) decrease in earnings of $175,000

c) decrease in earnings of $35,000

d) increase in earnings of $35,000

Reference no: EM132780322

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