Anazazi Co. offers all its 10,000 employees the opportunity to participate in an employee share-purchase plan. Under the terms of the plan, the employees are entitled to purchase 100 ordinary shares...

Anazazi Co. offers all its 10,000 employees the opportunity to participate in an employee share-purchase plan. Under the terms of the plan, the employees are entitled to purchase 100 ordinary shares (par value $1 per share) at a 20% discount. The purchase price must be paid immediately upon acceptance of the offer. In total, 8,500 employees accept the offer, and each employee purchases on average 80 shares at $22 per share (market price $27.50). Under IFRS, Anazazi Co. will record:

a.    no compensation since the plan is used to raise capital, not compensate employees.

b.    compensation expense of $5,500,000.

c.    compensation expense of $18,700,000.

d.    compensation expense of $3,740,000.