Under its executive stock option plan n corporation granted, Ask an Expert

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Under its executive stock option plan, N Corporation granted options upon January 1, 2013, that permit executives to purchase 12.0 million of company's $1 par common shares in the next eight years, but not before December 31, 2015 (the vesting date). The exercise price is the market price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated. Ignoring taxes, what is the effect on earnings in the year after the options are granted to executives?

A) $ 0 million.

B) $8.0 million.

C) $24.0 million.

D) $36.0 million.

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