Newly Public Companies and the Valuation of Employee Stock Options
This Issue Brief guides practitioners at soon-to-be and newly public companies through two major equity-compensation compliance challenges: 1) selecting an option-pricing model and 2) estimating key input assumptions, particularly expected term and expected volatility.
Because soon-to-be and newly public companies often lack extensive option and stock price data, they are generally required to base valuation assumptions largely on peer-firm data, a requirement complicated by strict FASB criteria concerning the selection of peers. This Issue Brief is relevant to private companies with material stock-based compensation grants, to newly public companies, and to those preparing to go public.
Don’t miss another topic! Get future Issue Briefs and other alerts from Equity Methods directly via email: