A Critical Review of the Fair Value Settlement Procedure for Stock Options
We review the European practice of fair value settlement of stock options after a successful takeover bid. We argue on both fundamental and practical grounds that the inherent complexity, arbitrariness and inaccuracy of fair value calculations call for replacement by intrinsic value settlement. This...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Tuwhera Open Access Publisher
2015-11-01
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| Series: | Applied Finance Letters |
| Subjects: | |
| Online Access: | https://ojs.aut.ac.nz/applied-finance-letters/article/view/29 |
| _version_ | 1818639977633808384 |
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| author | Oege Pennin Martijn J. van den Assem Remco C.J. Zwinkels |
| author_facet | Oege Pennin Martijn J. van den Assem Remco C.J. Zwinkels |
| author_sort | Oege Pennin |
| collection | DOAJ |
| description | We review the European practice of fair value settlement of stock options after a successful takeover bid. We argue on both fundamental and practical grounds that the inherent complexity, arbitrariness and inaccuracy of fair value calculations call for replacement by intrinsic value settlement. This alternative is simple, transparent, well-defined, and common practice at other exchanges |
| first_indexed | 2024-12-16T23:03:57Z |
| format | Article |
| id | doaj.art-387b47ff9d3649abb973b92e3ddcf040 |
| institution | Directory Open Access Journal |
| issn | 2253-5799 2253-5802 |
| language | English |
| last_indexed | 2024-12-16T23:03:57Z |
| publishDate | 2015-11-01 |
| publisher | Tuwhera Open Access Publisher |
| record_format | Article |
| series | Applied Finance Letters |
| spelling | doaj.art-387b47ff9d3649abb973b92e3ddcf0402022-12-21T22:12:38ZengTuwhera Open Access PublisherApplied Finance Letters2253-57992253-58022015-11-0141 & 210.24135/afl.v4i1and2.29A Critical Review of the Fair Value Settlement Procedure for Stock OptionsOege PenninMartijn J. van den Assem0Remco C.J. Zwinkels1VU University Amsterdam and Tinbergen InstituteVU University Amsterdam and Tinbergen InstituteWe review the European practice of fair value settlement of stock options after a successful takeover bid. We argue on both fundamental and practical grounds that the inherent complexity, arbitrariness and inaccuracy of fair value calculations call for replacement by intrinsic value settlement. This alternative is simple, transparent, well-defined, and common practice at other exchangeshttps://ojs.aut.ac.nz/applied-finance-letters/article/view/29fair valueintrinsic valuestock optionimplied volatilityoption pricingtakeover |
| spellingShingle | Oege Pennin Martijn J. van den Assem Remco C.J. Zwinkels A Critical Review of the Fair Value Settlement Procedure for Stock Options Applied Finance Letters fair value intrinsic value stock option implied volatility option pricing takeover |
| title | A Critical Review of the Fair Value Settlement Procedure for Stock Options |
| title_full | A Critical Review of the Fair Value Settlement Procedure for Stock Options |
| title_fullStr | A Critical Review of the Fair Value Settlement Procedure for Stock Options |
| title_full_unstemmed | A Critical Review of the Fair Value Settlement Procedure for Stock Options |
| title_short | A Critical Review of the Fair Value Settlement Procedure for Stock Options |
| title_sort | critical review of the fair value settlement procedure for stock options |
| topic | fair value intrinsic value stock option implied volatility option pricing takeover |
| url | https://ojs.aut.ac.nz/applied-finance-letters/article/view/29 |
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