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Under its executive stock option plan, Jonas Corporation granted...

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Accounting

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Under its executive stock option plan, Jonas Corporation granted options on January 1, 2016, that permit executives to purchase 300,000 shares of the company's $1 par common shares within the next eight years, but not before December 31, 2018 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. 1. What total amount of compensation expense does Jonas Corporation expect to recognize with respect to these options? 2. What amount of compensation expense will be recognized in 2016 with respect jo these options? 3. Assume that all of the options are exercised on 1/1/2019 when the market price of the common stock is $25 per share. By how mu will equity change as a result of recording this transaction

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