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lisov135 [29]
3 years ago
6

Knowledge Check 01 On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exer

cisable no sooner than December 31, Year 3, and expire on January 1, Year 7. Each option can be exercised to acquire one share of $1 par common stock for $14. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. What is the amount of compensation expense for Year 1
Business
1 answer:
Westkost [7]3 years ago
5 0

Answer:

$153,333

Explanation:

Calculation to determine What amount should Olympic recognize as compensation expense for 2016

Using this formula

Compensation expense =Total compensation/Vesting period

Let plug in the formula

Compensation expense=($5 x 92,000)/3 years

Compensation expense=$460,000/3 years

Compensation expense=$153,333

Therefore What amount should Olympic recognize as compensation expense for 2016 is $153,333

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4 0
3 years ago
Hernandez Corporation expects to have the following data during the coming year. What is Hernandez's expected ROE
Wewaii [24]

Answer:

13.56%

Explanation:

For the computation of return in equity first we need to follow some steps which are shown below:-

D/A = Debt ÷ Total assets

Debt = $200,000 × 65%

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Interest expense = $130,000 × 8%

= $10,400

Total assets = Total liabilities + Total equity

Total equity = $200,000 - $130,000

= $70,000

Net income = (EBIT - Interest expense) × (1 - Tax rate)

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= $9,490

ROE = Net income ÷ Equity

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7 0
3 years ago
Which term works best as a title for the list?
Marysya12 [62]

Answer: B. Land

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7 0
3 years ago
What is the argument commonly used by supporters of a state income tax? A. It will probably be quite regressive. B. It is a fair
kolbaska11 [484]

Answer:

D. It is a fair and more reliable source of revenue.

Explanation:

Their tax base is reliable and the amount is tie to the person or business income, so more tax implies that the person is having higher income as well. This make it fair, because high-income taxpayers contribute more nominal amount than low-income taxpayers, but the rate is the same for both.

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