I am having trouble with a homework question The financial statements of P&G are presented in...

I am having trouble with a homework question

The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online.

Click here to view Appendix B

Refer to P&G’s financial statements and accompanying notes to answer the following questions.

Part 1

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.

Under P&G’s stock-based compensation plan, stock options are granted annually to key managers and directors.

(1) How many options were granted during 2017 under the plan?

Options granted during 2017

Solutions

Expert Solution

Answer :

(a)

(1)

Under P&G’s stock-based compensation plan (Note 7), 21,425,000 options were granted during 2017.

(2)

At June 30, 2017, 140,803,000 options were exercisable by eligible managers.

(3)

In 2017, 44,071,000 options were exercised at an average price of $59.11.

(4)

The total stock – based compensation expense for stock options was 216,000,000, 199,000,000 and 223,000,000 for 2017, 2016 and 2015, respectively. Total compensation expense for restricted stock, RSUs and PSUs was $150,000,000, 143,000,000, and 114,000,000 in 2017, 2016, and 2015 respectively.

(5)

The accounts to which the proceeds from these option exercises are credited are Common Stock and Additional Paid-in Capital.

(6)

The number of outstanding options at June 30, 2017, is 206,485,000 at an average exercise price of $72.46.

(b)

(c)

In addition to options, P&G has restricted stock, restricted stock unit (RSU) and performance stock unit (PSU) award for key manager and directors.

ekkarill92 answered 1 year ago

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