Red Company Is a Calendar-Year U

Multiple Choice

Red Company is a calendar-year U.S.firm with operations in several countries.At January 1,2016,the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25.The vesting schedule is 20% the first year,30% the second year,and 50% the third year (graded-vesting) .The fair value of the options is estimated as follows:
What is the compensation expense related to the options to be recorded in 2017?

A) $ 48,000.
B) $ 96,000.
C) $128,000.
D) $140,000.