Question: On October 1 2011 Farmer Fabrication issued stock options for 100 000 shares

On October 1, 2011, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Farmer Fabrication's stock price increases by 5% in three years. Farmer initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in each of the next three years?

Sale on SolutionInn
  • CreatedJuly 11, 2013
  • Files Included
Post your question