Gans Incorporated developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2024, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par c
Gans Incorporated developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2024, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date—$10 per share. Options vest on January 1, 2028. They cannot be exercised before that date and will expire on December 31, 2030. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $40 per option. Ignore income tax.
On March 1, 2028, when the market price of Gans Incorporated's stock was $14 per share, 3 million of the options were exercised. The journal entry to record this would include:
Homework Answers
cash: 5 (five $1par common shares) *10 per share* 3million = 150
pic: 3*40= 120
common stock 15(10+5)*$1 par= 15
150+120-15=255
answer: a credit to paid in capital excess of par for $255 million
Add Answer to:
Gans Incorporated developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2024, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par c
Under its executive stock option plan, W Corporation granted options on January 1, 2021, that permit...
Under its executive stock option plan, W Corporation granted options on January 1, 2021, that permit executives to purchase 29 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 the market price of the shares on the date of grant, $20 per share. The fair value of the options, estimated by an appropriate option pricing model, is $6 per option. No forfeitures are...
Under its executive stock option plan, National Corporation granted 18 million options on January 1, 2018,...
Under its executive stock option plan, National Corporation granted 18 million options on January 1, 2018, that permit executives to purchase 18 million of the company’s $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $15 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. Suppose...
On January 1, 2018, M Company granted 95,000 stock options to certain executives. The options are...
On January 1, 2018, M Company granted 95,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $9. An option-pricing model estimates the fair value of the options to be $4 on the date of grant. If unexpected turnover in 2019 caused the company to estimate that 15% of the options would be...
On January 1, 2018, M Company granted 93,000 stock options to certain executives. The options are...
On January 1, 2018, M Company granted 93,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $10. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. If unexpected turnover in 2019 caused the company to estimate that 20% of the options would be...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2018, options were granted for 12 million $1 par common shares. The exercise price is the market price on the grant date—$7 per share. Options cannot be exercised prior to January 1, 2020, and expire December 31, 2024. The fair value of the 12 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation...
Under its executive stock option plan, Muehlmann Corporation granted options on January 1, 2024, that permit executives to purchase 25.5 million of the company's $1 par common shares within the next eight years, but not before December 31, 2026 (the vesti
Under its executive stock option plan, Muehlmann Corporation granted options on January 1, 2024, that permit executives to purchase 25.5 million of the company's $1 par common shares within the next eight years, but not before December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures were...
On January 1, 2021, M Company granted 96,000 stock options to certain executives. The options are...
On January 1, 2021, M Company granted 96,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2023, and expire on January 1, 2027. Each option can be exercised to acquire one share of $1 par common stock for $9. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. What amount should M recognize as compensation expense for 2021? ---- On January 1, 2021, M Company...
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2018,...
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2018, that permit executives to purchase 30 million of the company’s $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $25 per share. The fair value of the options, estimated by an appropriate option pricing model, is $3 per option. No...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2018, options w...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2018, options were granted for 28 million $1 par common shares. The exercise price is the market price on the grant date-$8 per share. Options cannot be exercised prior to January 1, 2020, and expire December 31, 2024. The fair value of the 28 million options, estimated by an appropriate option pricing model, is $1 per option Required: 1. Determine the total compensation...
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2018,...
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2018, that permit executives to purchase 30 million of the company's $1 par common shares within the next eight years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant. $27 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose...
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2018, options were granted for 28 million $1 par common shares. The exercise price is the market price on the grant date-$8 per share. Options cannot be exercised prior to January 1, 2020, and expire December 31, 2024. The fair value of the 28 million options, estimated by an appropriate option pricing model, is $1 per option Required: 1. Determine the total compensation...
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2018, that permit executives to purchase 30 million of the company's $1 par common shares within the next eight years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant. $27 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose...
Most questions answered within 3 hours.
-
A researcher is using a two-tailed hypothesis test with α =
.05 to evaluate the effect...
asked 8 minutes ago -
Two long, straight wires are parallel and 8.5 cm apart. The top
wire carries a current...
asked 1 hour ago -
Three arguments used to promote trade barriers are the national
security argument, the infant-industry argument, and...
asked 1 hour ago -
Question 3:
Percentage of Completion
Method (12 marks) On January 1, 2017, Eagle Construction Ltd.
started...
asked 1 hour ago -
A company purchased a tract of land for its natural resources at
a cost of $2,042,900....
asked 1 hour ago -
1. These financial statement item are
for UPS Company at fiscal year-end, October 31, 2019.
...
asked 1 hour ago -
PYTHON HOMEWORK
When an object is falling because of gravity, the following
formula can be used...
asked 1 hour ago -
Which of the following groups is comprised solely of
chemoheterotrophs?
Click all that apply.
animals
fungi...
asked 1 hour ago -
What is the feminist theory in 100 words or more?
book: Juvenile Justice In America, Clemens...
asked 2 hours ago -
1) What is the probability of a randomly selected value from a
normally distributed population falling...
asked 2 hours ago -
Why is it important for managers to include social
responsibility and environmental responsibility along with goals...
asked 2 hours ago -
THIS IS THE CODE I AM TRYING TO RUN
code
# def main():
#Reading a as...
asked 2 hours ago