Question

astore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $34 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $9.50 per option. What would be the total compensation indicated by these options

Answer 1

$9,500,000

Step-by-step explanation:

Calculation to determine What would be the total compensation indicated by these options

Using this formula

Total compensation=Options granted *Estimated fair value of the options

Let Plug in the formula

Total compensation=1,000,000 × $9.50

Total compensation= $9,500,000

Therefore What would be the total compensation indicated by these options is $9,500,000