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Sally Jameson: Valuing Stock Options in a Compensation Package  

by: Tufano, Peter; Lewittes, Michael
Source: Harvard Business School 

Details a thinly disguised situation faced by a recent Harvard MBA graduate who was forced by a prospective employer to place a dollar value on a grant of stock options. There are two objectives: 1) Serves as an introduction to option valuation, in which students have an opportunity to use market data to value an option in a realistic setting. 2) The setting permits a broader discussion of the wisdom of option-based incentive plans and the popular misconceptions of the value of option grants based on a widespread misunderstanding of how options work and how they are valued.


Details

Link: Sally Jameson: Valuing Stock Options in a Compensation Package  
Publication Date: 2003-08-19
Pages: 6