Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise

Question

3 years ago

14

Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise

price is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $5.50 per option. What would be the total compensation indicated by these options?

Business

1 answer:

harina [27] · Answer 1 · 2022-08-27T08:41:15+03:00

harina [27]3 years ago

5 0

Answer:

$5,500,000

Explanation:

Total fair value of the options = Number of shares in the option × Estimated fair value per option = 1,000,000 × $5.50 = $5,500,000

Therefore, the total compensation indicated by these options would be $5,500,000.