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):
