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8090 [49]
3 years ago
14

On December 31, 2017, Houser Company granted some of its executives options to purchase 150,000 shares of the company's $50 par

common stock at an option price of $60 per share. The Black-Scholes option pricing model determines total compensation expense to be $3,000,000. The options become exercisable on January 1, 2018, and represent compensation for executives' past and future services over a three-year period beginning January 1, 2018. What is the impact on Houser's total stockholders' equity for the year ended December 31, 2017, as a result of this transaction under the fair value method
Business
1 answer:
storchak [24]3 years ago
3 0

Answer: $1,000,000 decrease

Explanation:

From the information above, the Black-Scholes option pricing model determines that the total compensation expense to be $3,000,000 and the option was for a 3 year period.

The impact on Houser's total stockholders' equity for year ended December 31, 2017, based on this transaction under the fair value method will be:

Total compensation expense/time period= $3,000,000/3= $1,000,000

decrease in net income because of compensation expense.

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You work in the finance division of a company listed in the Stock Exchange. You have just learned that your supervisor has been
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Answer:

  • Yes it is.
  • Ethical issue ⇒ Insider Trading.

Explanation:

Trading on the stock exchange is supposed to be as fair as possible so that every investor has a fair chance of making returns. If a person - like this supervisor - is using information that is material but not publicly disclosed yet to trade on markets, the fairness of the market is compromised because the person will have an edge over other investors which will enable them make unfair profits.

Information on quarterly returns is usually material so we can expect it to be material here as well which means that the supervisor is engaged in insider trading.

Insider trading is not only unethical but also highly illegal. Reporting your supervisor can get them sent to jail.

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3 years ago
What does the price elasticity of supply measure? Click or tap a choice to answer the question. how income affects spending the
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You didn't put all the alternatives, but I understand economics and I know exactly that concept.

Supply price elasticity measures how price changes impact the supply of goods and services. If the elasticity of supply is elastic, it means that supply is very sensitive to price changes. If the price goes down even slightly, the supply of goods will fall sharply. If the price increases, even if little, the offer will increase much. Conversely, if supply is inelastic, price changes will have little effect on supply for the good. If the price goes down, there will be little impact on the supply of the good. If the price increases, there will also be little impact on supply.

4 0
3 years ago
Diversification merits strong consideration whenever a single-business company A. has integrated backward and forward as far as
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Answer:

The correct answer is B.

Explanation:

Diversification is a business strategy in which a company enters a field or market different from its core activity. It is a risk management strategy that mixes a wide variety of investments within a portfolio by allocating capital in a way that reduces the exposure to any one particular asset or risk.

Diversification merits strong consideration whenever a single-business company is faced with diminishing market opportunities and stagnating sales in its principal business.

3 0
3 years ago
As a contemporary manager, your employees will perceive that their opinions are more valued if:
sergij07 [2.7K]

The answer is this: employees would feel that their opinions matter if open communication is established between the manager and the employee by removing barriers to communication.

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3 0
3 years ago
Suppose a three period weighted average is being used to forecast demand. Weights for the periods are as follows: 0.1, 0.4 and 0
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Answer:

$143

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= Weightage × demand observed + Weightage × demand observed +  Weightage × demand observed

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