Detailed Answer
(c) If the stock options are for past services, as indicated
when the options are immediately exercisable by the holders,
compensation cost must be fully expensed at the grant date.
Answer (a) is incorrect because usually deferred compensation
expense is recognized. Answer (b) is incorrect because deferred
compensation expense is recognized when service has not yet
been provided. Answer (d) is incorrect because when options
are provided for prior service compensation expense must immediately
be recognized.