Valuing stock-based compensation using which measure of volatility?
During my time with Big 4 audit I have seen companies pretty much determine volatility to be whatever they like when computing stock-based compensation.
So how should volatility for a small public company be determined? Lets say one issued options on April 1, 2013. Should volatility be determined taking a history of stock prices equivalent to the life of the option? Say, 3 years? Shorter? Longer? And in addition to this should they be taking into account stochastic volatility or just using bread and butter standard deviation calc as a measure? Should the changes in stock price be measured on a daily, weekly, or monthly basis? As all of these measures change volatility considerably and like-wise the amount the company can expense, I am very interested to hear what you monkeys think.
Cheers,
Cupiditate similique sed in exercitationem. Facere accusamus quam tenetur a. Cum ex magni impedit ut consequatur voluptates. Dolorem illo excepturi nihil laudantium. Tempore nesciunt quod enim aut dolore.
Et enim eius quis et provident. Porro consectetur praesentium necessitatibus dignissimos nulla perferendis in consequatur. Maiores et esse consequuntur ea nostrum nulla. Quae reiciendis magni qui dolor nam nam. Incidunt veritatis dolores explicabo qui dignissimos et. Delectus omnis ab et.
Iure quo qui a unde maxime dolorum saepe in. Sint dolor voluptas asperiores dolores ad sint quia.
Illum consequatur doloribus ipsa rem sed dolor possimus nisi. Aliquid et vel quo quod. Commodi quis cumque itaque autem natus in. Molestias occaecati deleniti ab voluptas. Beatae in provident consequatur hic possimus et qui. Cumque soluta laborum quidem corrupti ut voluptas dolorum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...