Determining fair values of performance-vested and forfeiture-embedded employee stock options

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3 Citations (Scopus)

Abstract

This study provides a new approach to determine the fair value of ESOs by extending the performance-vested option pricing model. The model developed in this study takes both vesting period and forfeiture rate into consideration to capture characteristics of ESOs. Empirical and sensitivity analyses give evidence for the importance of these two elements. Empirical results also support that the derived model can be employed to increase the accuracy of ESOs' fair value.

Original languageEnglish
Pages (from-to)1083-1106
Number of pages24
JournalAccounting and Finance
Volume53
Issue number4
DOIs
Publication statusPublished - 2013 Dec 1

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All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)

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