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Employee Stock Option Exercise Behavior and Firms' Claims about Employee Stock Option Expense

Abstract This dissertation analyzes the reliability of reported employee stock option (ESO) expense, the determination of expected life of ESOs, motivations to manipulate ESO expense, and the impact of noise in ESO expense on subsequent stock price returns. Based on unique data, this is the first paper to measure average historical ESO life for all employees of a broad set of firms. I find average life has a mean of 4.12 years. Average life is reduced by 0.38 years per 10 percentage point increase in volatility, and industry effects explain an additional 7% of the variation. Reported expected life increases 0.37 years per year of historical life and an additional 0.16 years per year of age of the outstanding options. Deviations of reported volatilit... (more)
Created Date 2011
Contributor Young, Brian (Author) / Coles, Jeffrey (Advisor) / Hertzel, Michael (Committee member) / Babenko, Ilona (Committee member) / Arizona State University (Publisher)
Subject Business / ESO / Exercise Behavior / SFAS 123(R) / Stock Options
Type Doctoral Dissertation
Extent 69 pages
Language English
Reuse Permissions All Rights Reserved
Note Ph.D. Business Administration 2011
Collaborating Institutions Graduate College / ASU Library
Additional Formats MODS / OAI Dublin Core / RIS

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Description Dissertation/Thesis