Wall Drugs offered an incentive stock option plan to its employees. On January 1

Question

Wall Drugs offered an incentive stock option plan to its employees. On January 1,.2018, options were granted for 78,000 $1 par common shares. The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2021, and expire December 31, 2022. Each option has a fair value of $1 based on an option pricing model ns were granted What is the total compensation cost for this plan? Multiple Choice $0. $390,000 KPrev 6 of 12 Next > e to search 7/28/201

Explanation / Answer

Total compensation cost for this plan = 78000*1 = $78000 Compensation expense 22000 =(66000*1)/3         Paid-in capital—stock options 22000

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