On January 1, 2015, ML Company grants 100 cash share appreciation rights to each of its 500 employees, on the condition that the employees remain in its employ for the next three years. During the year, 15 employees left the firm. ML Company estimates that around 45 employees will leave over the next two years. In 2016, 20 employees left the firm and ML Company expects that 20 employees will leave by next year. At the end of 2017, 150 employees exercise their share appreciation rights. In 2018, another 140 employees exercise their share appreciation rights. At the end of 2019, all the remaining 150 employees exercise their share appreciation rights. Year Fair value of the SAR Intrinsic value of the SAR 2015 22 2016 26 2017 28 26 2018 32 28 2019 31 31 1. How much is the compensation expense in 2016? a. 460,667 b. 430,667 c. 448,666 d. 322,667
On January 1, 2015, ML Company grants 100 cash share appreciation rights to each of its 500 employees, on the condition that the employees remain in its employ for the next three years. During the year, 15 employees left the firm. ML Company estimates that around 45 employees will leave over the next two years. In 2016, 20 employees left the firm and ML Company expects that 20 employees will leave by next year.
At the end of 2017, 150 employees exercise their share appreciation rights.
In 2018, another 140 employees exercise their share appreciation rights.
At the end of 2019, all the remaining 150 employees exercise their share appreciation rights.
Year Fair value of the SAR Intrinsic value of the SAR
2015 22
2016 26
2017 28 26
2018 32 28
2019 31 31
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