Using binomial pricing model estimate the fair value

Assignment Help Accounting Basics
Reference no: EM13132992

On January 1, 2011, G Corp. granted stock options to key employees for the purchase of 80,000 shares of the company's common stock at $25 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2013, by the grantees still in the employ of the company. No options were terminated during 2011, but the company does have an experience of 4% forfeitures over the life of the stock options. The market price of the common stock was $31 per share at the date of the grant. G Corp. used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should G charge to compensation expense for the year ended December 31, 2011?

Reference no: EM13132992

Questions Cloud

Distance and bearing-army cadet : An army cadet is involved in a compass exercise. He leaves point O and walks 50m due west to point A. He then walks 80m due north to point B and finally 60m on a bearing of 320 deg to point C.
What are the main types of asset being amortized : Answer the following questions based on the 2011 annual report of Proctor & Gamble Corporation (P&G). A link to the annual report is provided below. The financial statements are on pp. 31-74 of the annual report, and all questions can be answered ..
What is the molar concentration of the ammonia : If 19.0 mL of 0.800 M HCl solution are needed to neutralize 5.00 rm mL of a household ammonia solution, what is the molar concentration of the ammonia?
Compact metric space and contraction maps : Let (X,d) be a compact metric space, and let Con(X) denote the set of contraction maps on X. We shall define the distance between two maps f,g which belongs to Con(X) as follows:
Using binomial pricing model estimate the fair value : The market price of the common stock was $31 per share at the date of the grant. G Corp. used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should G charge to compensation expense for the year e..
Types of symmetry : Describe objects that have each of the following types of symmetry.
Deep-colored magic : I agree with Connie, The Catalinas hold their own deep-colored magic,because when I was in the military is was station at white sands New Mexico, which east of Arizona, and six to eight hours away. While in the military I was in a program to help sin..
What is consolidated net income : During the current year, Jordan reported interest expense of $22,000 while Fey reported interest income of $21,000. What is consolidated net income?
Contemplating an advertising campaign : Disney's variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd