On January 1, 2016, Watchtower Corporation granted Emma Freegross, its president, a compensatory stock option plan to purchase 8,000 shares of Watchtower's $10 par common stock. The option price is $25 per share and the option has a fair value of $7 per option. The option is exercisable on January 1, 2020, after four years of service. How much compensation expense should Watchtower recognize on December 31, 2016.

a. 56,000

b. 14,000

c. 80,000

d. 0

Answer rating: 100% (QA)

Since the option is exercisable after 4 ye... View the full answer