Answered

Get the answers you need at Westonci.ca, where our expert community is always ready to help with accurate information. Experience the ease of finding accurate answers to your questions from a knowledgeable community of professionals. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.

Under its executive stock option plan, Z Corporation granted options on January 1, 2021, that permit executives to purchase 15 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, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. The options expired in 2027 without being exercised. By what amount will Z's shareholder's equity be increased as a result of having granted the options

Sagot :

abiolataiwo2015

Answer:

$60 million

Explanation:

Calculation to determine By what amount will Z's shareholder's equity be increased as a result of having granted the option

Using this formula

Increased in shareholder's equity=Fair value per option*Options granted

Let plug in the formula

Increased in shareholder's equity=$4* 15 million shares

Increased in shareholder's equity=$60 million

Therefore The amount that Z's shareholder's equity increased as a result of having granted the option is $60 million

Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.