Find what amount m recognize as compensation expense

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Question 1: On January 1, 2011, M Company granted 120,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2014 and expire on January 1, 2017. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. No options were terminated during 2011. If unexpected turnover in 2012 caused the company to estimate that 10% of the options would be forfeited, what amount should M recognize as compensation expense for 2012?

Reference no: EM132523386

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