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slytherin services, inc. granted 8 million of its $1 par common shares to executives subject to foreiture if employment is terminated within three years. the common shares have a market price of $6 per share on the grant date of the restricted stock award. ignoring taxes, what is the total compensation cost pertaining to the restricted shares (first answer, no dollar signs or commas, rounded to the nearest whole dollar)?

Respuesta :

The total compensation cost pertaining to the restricted shares equals to the amount of $48 million.

What are compensation cost?

Also known as compensation expenses, include the recruiting costs, salaries, payroll taxes, benefits and bonuses. They form the significant part of a company's operating costs, which means that it affects corporate profitability.

According to the scenario, we will calculate the total compensation cost pertaining to the restricted shares by using following formula. Total Compensation Cost Pertaining to the Restricted Shares:

= Common Share × Market Price Per Share

= 8 million × $6

= $48 million

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