Description

Introduction to valuation of employee stock compensation awards. Service, market, and performance conditions and their impact the fair value. Deeply out-of-the-money options. Size and leverage impact on the volatility. Introduction to Black-Scholes, binomial model, and Monte Carlo simulations.

Learning Outcomes:

• List and explain the different types of options
• Identify the methodologies used to value options
• Define the concept of "moneyness" and how it impacts the selection of the valuation methodology
• Identify significant assumptions used in the valuation of options
• Recognize the ASC 718 and SAB 14 requirements for estimating the expected volatility for public companies
• Recognize the AICPA recommendations for estimating the expected volatility for privately-held companies

Speaker(s):

• Oksana Westerbeke, CFA, Principal - Transaction Services, Grant Thornton LLP