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

10

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 $39 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $7.00 per option. What would be the total compensation indicated by these options

Business

1 answer:

Step2247 [10] · Answer 1 · 2022-04-22T23:13:06+03:00

Answer:

$7,000,000

Explanation:

Calculation to determine What would be the total compensation indicated by these options

Using this formula

Total Compensation =Beginning options*Fair value of the options

Let plug in the formula

Total Compensation =1,000,000 shares × $7

Total Compensation =$7,000,000

Therefore What would be the total compensation indicated by these options is $7,000,000