How much do Employee Stock Options really cost?

About this item

Title

How much do Employee Stock Options really cost?

Content partner

University of Canterbury Library

Collection

UC Research Repository

Description

From 2007, New Zealand firms must report the cost of granting employee stock options (ESOs). Market-based option pricing models assume that options are continuously tradable and thus that option holders are indifferent to the specific risk of the firm. ESOs, by contrast, cannot be traded and so their cost depends on the risk aversion and under-diversification characteristics of the recipient. Using hypothetical ESOs, we show that ESO cost is extremely sensitive to employee characteristics, th...

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Format

Research paper

Research format

Conference paper

Date created

2006

Creator

Boyle, G. / Clyne, S. / Roberts, H.

URL

http://hdl.handle.net/10092/2398

Related subjects

Fields of Research::340000 Economics::340200 Applied Economics::340203 Finance economics

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