Brief Exercise 19-2 Restricted stock units LO19-1 Second Link Services granted r

Question

Brief Exercise 19-2 Restricted stock units LO19-1 Second Link Services granted restricted stock units (RSUs) representing 11 milion of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisty the vesting requirement, the company will distribute the shares. The common shares had a market price of $22 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).) milion 2. Ignoring taxes, what is the effect on earnings in the year after the RSUs are granted to executives? Enter your answer in milions rounded to 1 deciumal place tie., 5.500,000 should be entered as 5.5) TOSHIBA 2 3 4 5 6 8 W E RTYU

Explanation / Answer

RSU granted shares 11 millions

Market price per share $22

Total compensation cost $242 millions

Total compensation cost is equally over the four-year vesting period

= $242 millions / 4 years

= $60.5 millions

Effect on earnings $60.5 millions in each year.

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.