Question: Second Link Services granted restricted stock units (RSUs) representing 16 million of its $1 par common shares to executives, subject to forfeiture if employment is

Second Link Services granted restricted stock units (RSUs) representing 16 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $10 per share on the grant date. Ignoring taxes, what is the total compensation cost pertaining to the restricted stock units? What is the effect on earnings in the year after the shares are granted to executives?

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