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Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2016,...

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Accounting

Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2016, options were granted for 84,000 $1 par common shares. The exercise price equals the $6 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2019, and expire December 31, 2020. Each option has a fair value of $1 based on an option pricing model. What is the total compensation COST for this plan?

$84,000.

$504,000.

$588,000.

$0.

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