Question

Company A has 800 employees, and it decides to grant each of the employees 50 share options as part of its new rewards plan. The options are exercisable over 5 years and subject to a 3-year service condition. The fair value of each option at the grant date is $16. The company estimates that 80% of its employees will meet the service condition required for receiving the options. Calculate the total share-based payment expense for Company A assuming that 80% of the employees actually meet the service condition.

Answer 1

The total share-based payment expense for Company A is mathematically given as

TS= $512,000.

What is the total share-based payment a expense for Company A?

let number of Employees satisfying service condition be x

Hence

x= 800* 0.8

x=640.

let the total No of options Estimated to be exercised be y

y= 640*50

y=32000.

Generally, the equation for  Total Share is mathematically given as

TS= The total  number of options expected to be exercised Muiltiplied by  Fair value

Therefore

TS= 32000* 16

TS= 512,000.

In conclusion,  the total share-based payment expense for Company A

TS= $512,000.

Read more about Total Share

https://brainly.com/question/25788016

#SPJ1