Witter House is a calendar-year firm with 380 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 35 million executive stock options permitting executives to buy 35 million shares of stock for $10 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $3 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $14 per share on the grant date. The average price of the common shares was $14 and $25 during 2021 and 2022, respectively.
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- Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2018 and 2019.As part of its executive compensation plan, at January 1, 2017, the company had issued 30 million executivestock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but notprior to January 1, 2020. The fair value of the options was estimated on the grant date to be $3 per option.In 2018, Witter House began granting employees stock awards rather than stock options as part of its equitycompensation plans and granted 15 million restricted common shares to senior executives at January 1, 2018.The shares vest four years later. The fair value of the stock was $12 per share on the grant date. The averageprice of the common shares was $12 and $15 during 2018 and 2019, respectively.The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company’snet income was $150 million and $160 million in 2018…Witter House is a calendar-year firm with 340 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 50 million executive stock options permitting executives to buy 50 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2024. The shares vest three years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $25 during 2024 and 2025, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $190 million and $200 million in 2024 and 2025,…Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 30 million executive stock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 15 million restricted common shares to senior executives at January 1, 2024. The shares vest three years later. The fair value of the stock was $12 per share on the grant date. The average price of the common shares was $12 and $15 during 2024 and 2025, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company’s net income was $150 million and $160 million in 2024 and…
- Witter House is a calendar-year firm with 400 million common shares outstanding throughout 2018 and 2019. As part of its executive compensation plan, at January 1, 2017, the company had issued 45 million executive stock options permitting executives to buy 45 million shares of stock for $14 within the next eight years, but not prior to January 1, 2020. The fair value of the options was estimated on the grant date to be $3 per option. In 2018, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2018. The shares vest four years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $30 during 2018 and 2019, respectively. The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company's net income was $250 million and $260 million…Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2016 and 2017. As part of its executive compensation plan, at January 1, 2015, the company had issued 30 million executive stock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but not prior to January 1, 2018. The fair value of the options was estimated on the grant date to be $3 per option. In 2016, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 15 million restricted common shares to senior executives at January 1, 2016. The shares vest four years later. The fair value of the stock was $12 per share on the grant date. The average price of the common shares was $12 and $15 during 2016 and 2017, respectively. The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company’s net income was $150 million and $160 million…In 2022, Farmington Corporation had 2,000 outstanding stock options, where employees could purchase shares of common stock at a discounted rate of $25 per share. The common stock currently has a market value of $40 per share. Farmington has total net income for 2022 of $500,000, a tax rate of 20%, and 600,000 outstanding shares of stock (outstanding the entire year). a) What is earnings per share (EPS) b) What is dilutive earnings per share (DEP)
- Accounting Witter House is a calendar-year firm with 470 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 45 million executive stock options permitting executives to buy 45 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $30 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $320 million and $330 million in…Foyle, Inc., had 560,000 ordinary shares and outstanding at December 31, 2021. On July 1, 2022, an additional 40,000 shares were issued for cash. Foyle also had unexercised share options to purchase 32,000 ordinary shares at £15 per share outstanding at the beginning and end of 2022. The average market price of Foyle's ordinary shares was £20 during 2022. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2022?Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $30. The vesting schedule is 25% the first year, 25% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date AmountVesting Fair Valueper Option Dec. 31, 2021 25 % $ 6 Dec. 31, 2022 25 % $ 7 Dec. 31, 2023 50 % $ 9 Assuming Yellow prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), what is the compensation expense related to the options to be recorded in 2022?
- Under its executive stock option plan, National Corporation granted 15 million options on January 1, 2021, that permit executives to purchase 15 million of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that unexpected turnover during 2022 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2022 and 2023Under its executive stock option plan, National Corporation granted 21 million options on January 1, 2021, that permit executives to purchase 21 million of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $26 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that unexpected turnover during 2022 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2022 and 2023. (Enter your answers in millions rounded to 2 de Answer is not complete. Compensation expense ($ in millions) 2022 2023 cimal places (i.e., 5,500,000 should be entered as 5.50))On January 1, 2019, the total assets of the Dexter Company were $270 million. The firm'spresent capital structure, which follows, is considered to be optimal. Assume that there is noshort-term debt.Long-term Debt=$135,000,000 Common Stock=$135,000,000New bonds will have a 10 percent coupon rate and will be sold at par. Common stock, currently,selling at $60 a share, can be sold to net the company $54 a share. Stockholders' required rate ofreturn is estimated to be 12 percent., consisting of a dividend yield of 4 percent and an expectedgrowth rate of 8 percent. (The next expected dividend is $2.40, so $2.40/$60 = 4%.) Retained earnings are estimated to be $13.50 million. The marginal tax rate is 40 percent.Assuming that all asset expansion (gross expenditures for fixed assets plus related workingcapital) is included in the capital budget, the dollar amount of the capital budget, ignoringdepreciation is $135 million. The marginal tax rate is 40 percent. Assuming that all assetexpansion…