A company has granted 500,000 options to its executives. The stock price and strike price are both

Question:

A company has granted 500,000 options to its executives. The stock price and are both $40. The options last for 12 years and vest after four years. The company decides to value the options using an expected life of five years and a volatility of 30% per annum. The company pays no dividends and the risk-free rate is 4%. What will the company report as an expense for the options on its income statement?
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.