Keywords: ESOs
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Journal Articles
Managerial Finance (2014) 40 (1): 2–32.
Published: 07 January 2014
...John D. Finnerty Purpose – More than 80 percent of S&P 500 firms that issue ESOs use the Black-Scholes-Merton (BSM) model and substitute the estimated average term for the contractual expiration to calculate ESO expense. This simplification systematically overprices ESOs, which worsens...

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