Consider an employee stock option on a company that does not pay dividends. When the most common valuation method is used, what is likely to happen to the value calculated for the option when the vesting period is increased? choose one)

Question

Quizplus · Accepted Answer

Yes the value does go up as the vesting period increases because the expected life increases. The holder is constrained to behave more optimally!)

Consider an Employee Stock Option on a Company That Does