Review of Valuing Employee Stock Options (Wiley Finance) (Hardcover)

The book does a decent job of providing intuition on why traditional Black-Scholes framework will not work for Employee Stock Options. But then again, if directional intuition is what you are seeking, why spend the money on this book when you can get the same information by reading articles published in the Financial Analysts Journal (FAJ)? The book and the accompanying CD seem to be very cryptic when it comes to understanding the effects of early exercise. The CD is pretty much a black-box. If you think you can buy this book and explain the results of the analysis, then you are mistaken. Unless you have a PhD in Finance or a Masters in Financial Engineering, you may not understand what the algorithms do. Then again, if you had these degrees, you wouldn't need the book!

Product Description
A comprehensive guide to understanding the implications and applications of valuing employee stock options in light of the new FAS 123 requirements
Due to the new requirements of the Proposed Statement of Financial Accounting Standards (FAS 123) released by the Financial Accounting Standards Board (FASB)-namely the fact that employee services received in exchange for equity instruments be recognized in financial statements-companies are now scrambling to learn how to value and expense employee stock options (ESOs). Based on author Dr. Johnathan Mun's consulting and advisory work with the FASB consulting projects with several Fortune 500 firms, Valuing Employee Stock Options provides readers with a comprehensive look at this complex issue.
Filled with valuable information on binomial lattice and closed-form modeling techniques, Valuing Employee Stock Options can help financial professionals make informed decisions when attempting to ascertain the fair-market value of ESOs under the new requirements.
Johnathan Mun, PhD, MBA, MS, CFC, FRM (San Francisco, CA), is Vice President of Analytical Services at Decisioneering, Inc., the makers of Crystal Ball analytical software. He is also the author of Applied Risk Analysis (0-471-47885-7), Real Options Analysis (0-471-25696-X), and Real Options Analysis Course (0-471-43001-3), all of which are published by Wiley.

From the Inside Flap
The Financial Accounting Standards Board (FASB) released a Proposed Statement of Financial Accounting Standards (FAS) in 2004 that amended earlier FAS Statements 123 and 95. Soon after, the Wall Street Journal called this release "amoung the most far- reaching steps that the Financial Accounting Standards Board has made in its thirty-year history. " As a result, companies must learn how to rigorously and efficiently value and expense employee stock options (ESOs).

Based on author Johnathan Mun's advisory work with the FASB over 2003 and 2004, his graduate research work in the area of options analysis, and actual FAS 123 consulting projects with several Fortune 500 firms, Valuing Employee Stock Options provides you with a comprehensive understanding of the valuation applications of a customized binomial lattice through a systematic and objective assessment of the methodology.

This just-in-time resource includes informative sections that:

• Review the impact of ESO Cost
• Illustrate the issues of fair market valuation through an analytical assessment of three mainstream approaches used in option pricing
• Discuss the technical background required to run the Black-Scholes model (BSM) and customized binomial lattices
• Run through in-depth sample case studies applying FAS 123
• Provide multiple options valuation results that prove valuable from the perspective of both an analyst and a chief financial officer

The analyses performed in this book also use the author's own proprietary customized binomial lattice computer algorithms as well as his Real Options Analysis Toolkit, and Decisioneering, Inc.'s Crystal Ball Monte Carlo simulation software.

Filled with in-depth insight and expert advice, Valuing Employee Stock Options can help CFOs and finance directors as well as analysts, consultants, and accountants understand the implications and applications of valuing employee stock options in light of today's ever-changing financial rules and regulations.

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