Second Link Services granted restricted stock units (RSUs) representing 13 milli

Question

Second Link Services granted restricted stock units (RSUs) representing 13 million of its $1 par commor shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares million of the RSUs satisfy the vesctrto forfeiture if had a market price of $20 per share on the grant date. 1. Ignoring taxes, what is the total compensation cost pertaining to the restricted stock units? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) Total compensation cost million 2. Ignoring taxes, what is the effect on earnings in the year after the RSUs are granted to executives? (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as Effect on earnings million

Explanation / Answer

1 total compensation cost = $260 million 2 Effect on earnings decreased by $ 65 million (260/4)

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