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SAB 107 Transition
For a company with limited history, we blend the company's own data with data from comparable companies from our client database to develop a voluntary exercise model. In parallel, we estimate the company's projected post-vest termination rate, which can also be supplemented if necessary by cross-company data. This information is incorporated into a simulation model of the company's future stock price based on the companies own volatility and equity risk premium to derive a supportable expected term for use with Black-Scholes.For a company with limited history, we blend the company's own data with data from comparable companies from our client database to develop a voluntary exercise model. In parallel, we estimate the company's projected post-vest termination rate, which can also be supplemented if necessary by cross-company data. This information is incorporated into a simulation model of the company's future stock price based on the companies own volatility and equity risk premium to derive a supportable expected term for use with Black-Scholes.
Our database is extensive with companies from micro cap to over 200 billion in market cap. Industries covered include Chemicals, Forest Products & Paper, Advertising, Internet, Media, Telecommunications, Auto Parts & Equipment, Distribution (Wholesale), Retail, Beverages, Biotechnology, Commercial Services, Healthcare-Products, Healthcare-Services, Pharmaceuticals, Oil & Gas Services, Banks, Diversified Financial Services, Insurance, Investment Companies, Real Estate, REITS, Electrical Components & Equipment, Electronics, Manufacturing, Computer Equipment Makers, Semiconductors and Software.
In general, our objective is to use enough comparable companies from the same industry and with comparable market-cap so that the analysis is based on substantial and supportable data.
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