On January 1, Year 1, Salt Lake Corporaton grants stock appreciation rights to its CEO. Under the plan, the CEO will receive cash for the difference between the quoted market price over a $50 option price for 1,000 shares of the company’s common stock on the exercise date. The service period is three years. The fair value per SAR is $15 at the end of Year 1 and $27 at the end of Year 2. Determine the compensation expense for Year 2.
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