second link services granted restricted stock units (rsus) representing 16 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four 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 $10 per share on the grant date. 1. ignoring taxes, what is the total compensation cost pertaining to the restricted stock units? 2. ignoring taxes, what is the effect on earnings in the year after the rsus are granted to executives?

Respuesta :

Compensation Expenses = 6 Million Shares X $29 per share (Fair Value per Share)= $174 Millions and Compensation Expenses deducted from Income = $174 Millions / 4 Years= $43.50 Millions

An expense is a thing that requires paying money, or fortune in general, to someone else or a group of people in exchange for a good, a service, or another kind of cost. Rent is an outlay for a tenant. Tuition costs money, whether for students or parents. The operating costs incurred by a business in order to produce revenue are referred to as expenses. It can be summed up by saying that the price one must pay to acquire something. To make money, as the adage goes, requires investment. The money spent and the expenses incurred by a business in pursuit of revenue are referred to as expenses in accounting. Account expenses, to put it simply, are the costs associated with operating a business that collectively support the actions necessary to produce profit.

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