Accounting for stock options Intel granted stock options to employees on December 31, 2007, permitting them to purchase 24 6 million shares of Intel common stock for $22 63 per share An option pricing model indicates that the value of each option on this date is $5 79 Intel expects to receive the b...

Intel accounting for stock options The value of the stock ...

Accounting for stock options. Intel granted stock options to employees on December 31, 2007, permitting them to

Question:

Accounting for stock options. Intel granted stock options to employees on December 31, 2007, permitting them to purchase 24.6 million shares of Intel for $22.63 per share. An option-pricing model indicates that the value of each option on this date is $5.79. Intel expects to receive the benefit of enhanced employee services for the next three years. On December 31, 2012, employees exercise these options when the market price of the stock is $40 per share. Compute the pretax effect of this option plan on the net income of Intel for 2008 through 2012.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...