Business, 05.05.2020 04:22 noodleboy0923

JBL Aircraft manufactures and distributes aircraft parts and supplies. Employees are offered a variety of share-based compensation plans. Under its nonqualified stock option plan, JBL granted options to key officers on January 1, 2021. The options permit holders to acquire 5 million of the company's $1 par common shares for $25 within the next six years, but not before January 1, 2024 (the vesting date). The market price of the shares on the date of grant is $29 per share. The fair value of the 5 million options, estimated by an appropriate option pricing model, is $6 per option. Because the plan does not qualify as an incentive plan, JBL will receive a tax deduction upon exercise of the options equal to the excess of the market price at exercise over the exercise price. The tax rate is 25%.

Determine the total compensation cost pertaining to the incentive stock option plan.

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Answer from: nathanstern21

The total compensation cost pertaining to the incentive stock option plan will be $30,000,000

Explanation:

In order to calculate the total compensation cost pertaining to the incentive stock option plan we would have to use the followinf formula:

Total compensation cost of stock options=Estimated fair market value of the option×Number of options granted

Total compensation cost of stock options=$6×5,000,000 shares

Total compensation cost of stock options=$30,000,000

The total compensation cost pertaining to the incentive stock option plan will be $30,000,000

Answer from: marieb39

$ 30, 000, 000

Explanation:

Stock Options are options allocated to the employee to purchase a definite number of shares of stock of the company at a agreed price during a definite period of time

The total compensation of the aircraft can be calculated as follows:

The total compensation cost pertaining to the incentive stock option can be determined by the fair market value per stock option and the number of options granted :

Total compensation of stock options = Estimated fair market value of the option × Number of points generated

Total compensation of stock options = $6 × 5, 000, 000 shares

= $ 30, 000, 000

Answer from: Quest

i just took the test and it is financing

Answer from: Quest

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

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