Multiple Choice
On January 1,2016,Oliver Foods issued stock options for 40,000 shares to a division manager.The options have an estimated fair value of $5 each.To provide additional incentive for managerial achievement,the options are not exercisable unless Oliver Foods' stock price increases by 5% in four years.Oliver Foods initially estimates that it is not probable the goal will be achieved.How much compensation will be recorded in each of the next four years?
A) $10,000.
B) $45,000.
C) $50,000.
D) No effect.
Correct Answer:
Verified
Correct Answer:
Verified
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