On January 1, YearB, Iffers Company granted restricted stock units (RSUs) repres

Question

On January 1, YearB, Iffers Company granted restricted stock units (RSUs) representing 30 million of its $2 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $8 per share on January 1, Year8 iffers expects 10% of the employees to sever employment (leave the company) before the RSUs vest. If that estimate turns out to be correct, how much total compensation expense will ffers record (in all years combined) with respect to the RSUs? 0 A. 54 million O B. 240 million C. 24 million 0 D. 216 million O E. 60 million none

Explanation / Answer

Number of shares = 30 million

Market price= 8$

Emploeyes leaving 10%.

Therefore shares forfeited= 30*10%=3mn

Remaining shares to accounted as compensation = 30-3=27

compensation expense = 27*8=216

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