A company has granted 2,000,000 options to its employees. The stock price and strike price are both

Question:

A company has granted 2,000,000 options to its employees. The stock price and are both $60. The options last for 8 years and vest after two years. The company decides to value the options using an expected life of six years and a volatility of 22% per annum. The on the stock is $1, payable half way through each year, and the risk-free rate is 5%. 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. Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...