Exhibit 15-7On January 1, 2016, 70 executives were granted a performance-based share option plan that would award them each a maximum of 300 shares of $5 par common stock for $12 a share based on the increase in sales over the next three years. The fair value per option on the grant date was $16. The award table is as follows:
Increase in Sales
No. of Shares
10%
100
15%
200
20%
300
The company estimates that the sales increase will be 22% and that the annual employee turnover rate will be 2%.
?
Refer to Exhibit 15-7. In 2017 the actual sales increase was determined to be 18%, and the overall turnover rate was exactly 2%. The compensation expense for 2017 is (to the nearest dollar)
A. $210,828.
B. $140,552.
C. $70,276.
D. $35,138.
Answer: D
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