search query: @indexterm OPTION PRICES / total: 70
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| Author: | Marquardt, C.A. |
| Title: | The cost of employee stock option grants: an empirical analysis |
| Journal: | Journal of Accounting Research
2002 : SEP, VOL. 40:4, p. 1191-1217 |
| Index terms: | Economic forecasting Option prices Share incentive schemes Stock options |
| Language: | eng |
| Abstract: | Empirical evidence on the ex post costs of employee stock option (ESO) grants to issuing companies is presented and it is examined, whether the Black-Scholes (1973) model provides reasonable estimates of these values. Because there are no market prices for ESOs, the traditional avenues for testing option-pricing models are unavailable. Instead, this research relies on techniques from the economic forecasting literature, viewing model values as forecasts of the options' payoff. The theoretically appropriate rate at which to discount ESO payoffs is derived under the maintained hypothesis that the Black-Scholes model is valid. |
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