A company has granted 2000000 options to its employees the, Ask an Expert

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A company has granted 2,000,000 options to its employees. The stock price and strike price are both $60. The options last for 8 years and vest after 2 years. The company decides to value the options using an expected life of 6 years and a volatility of 22% per annum.

Dividends on the stock are $1 per year, payable halfway through each year, and the risk-free rate is 5%. What will the company report as an expense for the options on its income statement?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91993453

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