Valuing Employee Stock Options Using a Lattice Model

@inproceedings{Schubert2004ValuingES,
  title={Valuing Employee Stock Options Using a Lattice Model},
  author={Walt Schubert and Bonnie O'Rourke},
  year={2004}
}
A recent FASB exposure draft on stock-option expensing would require the valuation of equitybased compensation awards at their grant date. Option value and the resulting expense are based upon models that capture the characteristics determining the value of a particular grant of employee options. The exposure draft discusses lattice valuation models that accommodate the often complex attributes of option plans that can change over time. The lattice model can explicitly capture expected changes… CONTINUE READING
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