million of the company\'s $1 par common shares e). The exercise nted options on
ID: 2446137 • Letter: M
Question
million of the company's $1 par common shares e). The exercise nted options on January 1, Under its executive stock option plan, Choco Corpora 2013, that permit executives to purchése 10 within the next ten years, but not before December 31,201 price is the market price of the shares on the date of grant $10 per the options, estimated by an ap are anticipated. The eptions are exercis aare-By What amount will Choco's shareholder's equity be ten years, but not before December 31, 2016 (the vesting da grar, $10 per share. The fair value of ion. No forfeitures propriate option pricing mode equity be increased when the options are [Ofor exercised? (hint: think about the journal entry on April2,2017) try on April 2,2017 U p/sm A. $70 million. $109-million.. C. 170 million. D. $10 million. Under its executive stock option plan, Choco Corporation granted options on January 1, 2013, that permit executives to purchase 10,000 shares of the company's $1 par common stock within the next ten years, but not before December 31, 2016 (the vesting date). The exercise price is the market price of the shares on the date of grant, $12 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No forfeitures are anticipated. The entire options expired in 2019 without being exercised Prepare journal entry A. Compensation expense 50,000 Paid in capital-expired stock option 50,000 50,000 B. Paid in capital-stock option Common stock 50,000 C. Common stock 50,000 Paid in capital-stock option 50,000 Paid in capital-stock option 50,0001 d in capital-expired stock option 50,000Explanation / Answer
According to me your both answers are correct
In the first case Choco's shareholders equity will increase by $100 million the break of which would be
10 million shares * $1 per share = 10 million increase of common stock
10 million shares * $9 per share = 90 million increase in retained earnings
Therefore total increase = $100 millions
The second answer given is also correct we will pass the last entry
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