The Impact of Corporate and Personal Taxes on the Valuation of Employee Stock Options

@inproceedings{Daves2005TheIO,
  title={The Impact of Corporate and Personal Taxes on the Valuation of Employee Stock Options},
  author={Phillip R. Daves and TN and Michael C. Ehrhardt},
  year={2005}
}
We incorporate the impact of corporate and personal taxes into the valuation of employee stock options. We provide three new results. First, we show that the fair value of the ESO, defined by the Financial Accounting Standards Board (FASB) in Financial Accounting Standards (FAS) No. 123, Accounting for Stock-Based Compensation, as the price that a willing investor would pay for the security, is less than the value given by a call option pricing model but greater than the value given by a… CONTINUE READING

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