• DocumentCode
    3038468
  • Title

    How to Calculate the Stockholders´ Cost of Stock Option Incentive

  • Author

    Zhang, Caiyu ; Huo, Guoqing ; Lu, Keping

  • Author_Institution
    Sch. of Manage., Grad. Univ. of Chinese Acad. of Sci., Beijing, China
  • fYear
    2009
  • fDate
    24-26 July 2009
  • Firstpage
    355
  • Lastpage
    359
  • Abstract
    In this paper we discuss the risk discount and cost of stock option contracts based on theory analysis and arithmetic operation. First the calculation of data shows that expectation value cost increases with the rise of exercise price, with the same result as the previous prediction. Meanwhile, B-S cost can become larger or smaller with higher exercise price, which suggests that the expectation value cost is more reasonable. Then we explore the relationship between the expectation value cost and the B-S cost in stock option contracts based on theory analysis and discover the rational explanations for the above conclusion.
  • Keywords
    contracts; pricing; stock markets; risk discount; stock option contracts cost; stock option incentive; stockholders cost; Conference management; Contracts; Cost function; Economic indicators; Energy management; Engineering management; Financial management; Mathematics; Pricing; Risk management; managers´ value; risk-averse; the B-S cost; the expectation value cost; the risk discount;
  • fLanguage
    English
  • Publisher
    ieee
  • Conference_Titel
    Business Intelligence and Financial Engineering, 2009. BIFE '09. International Conference on
  • Conference_Location
    Beijing
  • Print_ISBN
    978-0-7695-3705-4
  • Type

    conf

  • DOI
    10.1109/BIFE.2009.88
  • Filename
    5208869