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Business, 28.02.2020 21:52 CreMoye967

On December 31, 2019, some of Corrigan Corporation’s key executives were granted the option to buy 100,000 shares of the firm’s $5 par common stock at an option price of $15 per share. According to the Black-Scholes model, the total compensation expense associated with the options is $375,000. These options represent compensation for services provided over a four-year period beginning on January 1, 2020, and they become exercisable on that date. As of December 31, 2020, none of the executives had chosen to exercise their options. If Corrigan uses the fair value method, how will the executives’ stock options affect the firm’s net income for 2020?

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