Valuation of employee stock options using the exercise multiple approach and life tables
نویسندگان
چکیده
منابع مشابه
Market Valuation and Employee Stock Options
This paper investigates a market-valuation-based hypothesis for employee stock options (ESOs). It examines how market valuation has affected the decision to grant ESOs, the amount of options granted, and the distribution of options among executives and rankand-file employees. I find strong empirical evidence that firms with high market valuation and high probability of future overvaluation are ...
متن کاملEmployee Stock Options, Equity Valuation, and the Valuation of Option Grants Using a Warrant-Pricing Model
We investigate the use of a warrant-pricing approach to incorporate employee stock options (ESOs) into equity valuation and to account for the dilutive effect of ESOs in the valuation of option grants for financial reporting purposes. Our valuation approach accounts for the jointly determined nature of ESO and shareholder values. The empirical results show that our stock price estimate exhibits...
متن کاملThe Importance of Behavioral Factors in the Exercise and Valuation of Employee Stock Options∗
Options are a major component of corporate compensation and accounting methods significantly affect allocations, yet valuation remains a challenge. We develop the first empirical model of employee exercise suitable for valuation, and estimate the exercise rate as a function of option, stock, firm and employee characteristics in a large sample of all employee exercises at over 100 firms. These c...
متن کاملOn the Accounting Valuation of Employee Stock Options
In its Exposure Draft, "Accounting for Stock-based Compensation," FASB proposes that either the Black-Scholes or binomial option pricing model be used to expense employee stock options, and that the value of these options be measured on their grant date with typically modest ex-post adjustment. This brings the accounting profession squarely up against the Scylla of imposing too narrow a set rul...
متن کاملValuation of Employee Reload Options Using Utility Maximization Approach
The reload provision in an employee stock option is an option enhancement that allows the employee to pay the strike upon exercising the stock option using his owned stocks and to receive new “reload” stock options. The usual Black-Scholes risk neutral valuation approach may not be appropriate to be adopted as the pricing vehicle for employee stock options, due to the non-transferability of the...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Insurance: Mathematics and Economics
سال: 2016
ISSN: 0167-6687
DOI: 10.1016/j.insmatheco.2015.12.009