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To: Elmer Phud who wrote (178323)6/16/2004 1:39:32 PM
From: GVTucker  Read Replies (1) | Respond to of 186894
 
Note that there is no requirement that stock options be granted with a strike at FMV, no matter whether the company is public or private.

As far as determining FMV, usually the pricing of the most recent financing is used.



To: Elmer Phud who wrote (178323)6/16/2004 2:07:06 PM
From: The Duke of URLĀ©  Respond to of 186894
 
There is always a fmv. "Fifth Avenue Bell Coach v. Commissioner" You basically take your best guess and that is what the law allows you too do.

All Black Scholes is a means to attempt to value taking in considerations such as discount present value and estimates of volatility.

It is of course, an approximation, and IF it were correct, Mr. Scholes and Mr. Black would be Zillionares.