13 C.CunyandP.Jorion,“ValuingExecutiveStockOptions
with Endogenous Departure,” Journal of Accounting and
Economics20(1995):193–205.Theyexaminethevaluation
of options when there is the possibility of forfeiture.
14 J.N.Carpenter,“TheExerciseandValuationofExecutive
StockOptions,” JournalofFinancialEconomics 48 (1998):
127–158.
15 S. Huddart, “Employee Stock Options,” Journal of
Accounting and Economics18 (1994): 207–231.
16 R. Lambert, D. Larcker, and R. Verrecchia, “Portfolio
ConsiderationsinValuingExecutiveCompensation,”Journal
ofAccountingResearch(Spring1991):129–149;T.Hemmer,
S.Matsunaga,andT.Shevlin,“EstimatingtheFairValue’of
Employee Stock Options with Expected Early Exercise,”
Accounting Horizons8, no. 4 (December 1994): 23–42.
17 R. Brooks, D. Chance, and B. N. Cline, “Private
Information andtheExercise ofExecutive StockOptions,”
working paper, SSRN, 2005.
18 J.C.Bettis,J.M.Bizjak,andM.L.Lemmon,“TheCostof
Employee Stock Options,” working paper, SSRN, 2003.
19 The value per share, obtained using the treasury stock
approach,willbecome thestockpriceintheoptionpricing
model.Theoptionvaluethatresultsfromusingthispriceis
usedtocomputeanewvaluepersharewhichisfedbackinto
the option pricing model and so on.