On January 1, 2003, the Magily Company established a stock option plan for its senior employees. A…

On January 1, 2003, the Magily Company established a stock option plan for its senior employees. A total of 60,000 options were granted that permit employees to purchase 60,000 shares of stock at $48 per share. Each option had a fair value of $11 on the date the options were granted. The market price for Magily stock on January 1, 2003, was $50. The employees are required to remain with Magily Company for the entire year of 2003 in order to be able to exercise these options. Compute the total amount of compensation expense to be associated with these options under the:

1. fair value method.

2. intrinsic value method.

 

Looking for a Similar Assignment? Hire our Top Uk Tutors while you enjoy your free time! All papers are written from scratch and are 100% Original. Try us today! Active Discount Code FREE15