Homework Answers
Answer:
Requirements-1
Total compensation cost pertaining to the option= total stock options granted * estimated fair value per option.
= 45,000,000*5
= 225,000,000.
Total compensation cost pertaining to the option on January 1,2018 is 225,000,000.
Requirements-2.
The vesting date 2018 to 2020= 3 years
| December 31,2018 | compensation expenses (225,000,000/3years) | 75,000,000 | |
| Paid in capital stock options | 75,000,000 |
Requirements-3
| December 31,2019 | compensation expenses (225,000,000*96%*2/3)-75,000,000) | 69,000,000 | |
| Paid in capital stock options | 69,000,000 | ||
| December 31,2020 | compensation expenses (225,000,000*96%*3/3)-75,000,000-69,000,000) | 72,000,000 | |
| Paid in capital stock options | 72,000,000 | ||
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