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    Question

    Company grants ESOPs valued ₹50 lakh vesting over 4

    years. It uses graded vesting: half vest after 2 years, rest after 4. Total compensation expense to recognise by end of Year 1?
    A ₹6.25 lakh Correct Answer Incorrect Answer
    B ₹12.5 lakh Correct Answer Incorrect Answer
    C ₹25 lakh Correct Answer Incorrect Answer
    D ₹50 lakh Correct Answer Incorrect Answer
    E ₹6.67 lakh Correct Answer Incorrect Answer

    Solution

    Graded vesting needs each tranche separately expensed. First tranche (₹25 lakh) over 2 years = ₹12.5 lakh per year. Total expense Y1 = ₹12.5 lakh.

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