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On January 1, 2015, Western Wear, Inc. granted 100,000 stock options to its employees. 30% of...

On January 1, 2015, Western Wear, Inc. granted 100,000 stock options to its employees. 30% of these options will vest on December 31, 2015, 30% will vest on December 31, 2016, and the remaining 40% will vest on December 31, 2017. The fair value of the options was $15.34 per share using a weighted-average expected life. The fair value of the 30,000 shares that vest in 2015 is $14.67 per share. The fair value of the 30,000 shares that vest in 2016 is $15.38 per share and the fair value of the remaining options is $16.30 per share. Western does not expect any forfeitures.

Prepare a memo to the file addressing Western Wear's compensation expense for 2015 through 2017. Use the Codification for support.

ISSUE: ?

ANALYSIS: ?

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Answer #1

Dividend is a cash payment that is made by the company to the stockholder as a return on his investment.

stock divident also known as script dividend is a dividend which is paid in form of additional shares instead & cash when comapny does not have enough liquid cash.

In case of graded resting, plans is sorted into various groups and then each group is treated as different plan with determined resting period and expected life.

compensation that should be recogised on 1st jan 2015, on the data of grant will be the fair value of shares on the data of granting the options.

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