| Calculate the value of employee stock options (ESO) for both publicly traded and privately held companies
Read articles about The BVR/DVA ESO 123R Compliance Calculator™ Calculate Now! Utilize data needed to value employee stock options for both publicly traded and closely held companies. Business Valuation Resources, LLC is proud to bring you The BVR/DVA ESO 123R Compliance Calculator™. This Compliance Calculator, developed by Derivative Valuation Associates, LLC, offers significant value in that it uses linked databases to calculate the appropriate measure of expected volatility as well as forward looking risk-free rates, which is unlike other software products that simply ask for these inputs. Currently, this is the only online calculator that is suitable for valuing ESOs in privately held businesses as it takes into account specific factors that distinguish ESOs in closely held firms from publicly traded stock options. In 2005, the FASB issued FAS123R which requires fair valuation of employee stock options issued as compensation to employees and the use of state-of-the-art option valuation models by appraisers. The BVR/DVA ESO 123R Compliance Calculator™ allows for the valuation of both public and non-public employee stock options utilizing the preferred binomial lattice option-pricing model for American-type call options. The program implements the Hull-White model to value employee stock options for public companies. To value the employee stock options for closely held companies, the model uses the same basic methodology as the public company model. However, certain modifications handle the interactions between stock values and option values. Given a total equity value, The BVR/DVA ESO 123R Compliance Calculator™ iterates through possible stock prices using a bisection method, until the total value of stocks and options is equal to the total equity value. The BVR/DVA ESO 123R Compliance Calculator™ also includes a volatility calculator that ensures accuracy of your valuation by calculating the projected volatility using empirical data and a GARCH (Generalized AutoRegressive Conditional Heteroscedasticity) technique. Volatility can be calculated based on a user determined list of public companies or on an industry sector or group and market capital range. In addition, the Calculator uses daily Treasury yield curve rates to calculate the appropriate Risk-Free Rate. The daily yield curve, which relates the yield on a security to its time to maturity is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. These market yields are calculated from composites of quotations obtained by the Federal Reserve Bank of New York. Click here if you would like to subscribe to the The BVR/DVA ESO 123R Compliance Calculator™. If you have any questions, please either go to the The BVR/DVA ESO 123R Compliance Calculator™ FAQ (Frequently Asked Questions) page, call us in our West Coast location at 503-291-7963, fax us at 503-291-7955, email us at customerService@BVResources.com or mail us at:
In addition, you may contact Derivative Valuation Associates' Dr. Brett King at baking@una.edu. |
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Value of Employee Stock Options
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