Let's say you had 100 shares of a restricted stock with a restriction period of let's say 12 months, stock currently trades at $25. How would you go about valuing those shares, assuming you sell on the day restriction ends? I assume there would be some discount to the market price on account of the restriction, but is this a discount that can be identified formulaically?
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For valuation purposes, I would literally use current market value which is $25.
What is your reason for it?
I wouldn't try to assess the value after the restriction is removed unless I expected a large shift in the market value (in either direction) after the restricted period.
Depends on the type of restriction too.
If the shares were granted without a specific price I would account for them at the market value when granted.
If the shares were granted without a specific price but they have a cash payout provision I would use that as their value.
If the shares are sold at a discount to the employee I would account for them at the value originally paid.
If the shares were granted at a specific price I would account for them at the value when granted.
If you insisted on a formula you would need to account for the volatility of the stock and the probability it would vest/not vest.
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