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Hi
I don’t understand why the answer for this question includes the share options. Please advise. Isn’t the formula supposed to be (No of rights expected to Vest) (FV) (Timing Ratio)
So shouldn’t the answer be (100,000 – 900 – 700) (10) (1/2) = 492, 000
Shout granted 300 share options to each of its 100,000 employees at the current year start. The shares vest if the employees work for the Group for the next two years. At the current year end, 900 eligible employees had left the company. The estimate at the current year end of the number of employees leaving in the next year up to the vesting point was 700. The fair value of each share option at the grant date was $10. The fair value of each share option at the current year end was $12. The share options have not been accounted for in the financial statements.
Hi,
You give me the answer as you think that it is supposed to be but not as you have it elsewhere. Do you not need to multiply it by 300 as there were 300 options to each of the employees?
Thanks
Hi,
I did give my answer. (100,000 – 900 – 700) (10) (1/2) = 492, 000. This is what i calculated.
The part that i don’t understand is why do we multiply by 300 options when the formula doesn’t have options as part of it.
Number of rights to vest * FV * Timing ratio
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