How to value employee stock options (ESO)? This is possibly the central issue in the debate on whether these options should be expensed. According to basic accounting rules, if a value can be placed on this form of compensation, it should be expensed. Proponents of expensing employee stock options say there are many models that can be used to place a value on options.
Opponents argue these models are not applicable to employee stock options. This article will take a look at the argument of the opponents and then explore the possibility of a different approach to determining the cost of employee stock options.
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