Exercise 8.5 ★ ★ ACCOUNTING FOR A GRANT WITH A MARKET CONDITION At the beginning of 2016, Bay Ltd grants 10 000 share options to a senior marketing executive, conditional on that executive remaining in the company’s employ until the end of 2018. The share options cannot be exercised unless the share price has increased from $20 at the beginning of 2016 to above $30 at the end of 2018. If the share price is above $30 at the end of 2016, the share options can be exercised at any time during the following 5 years. Bay Ltd applies a binomial option-pricing model that takes into account the possibility that the share price will exceed $30 at the end of 2018 and the possibility that the share price will not exceed $30 at the end of 2018. The fair value of the share options with this market condition is estimated to be $14 per option. Required Calculate the annual and cumulative remuneration expense to be recognised by Bay Ltd for 2016.