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Hello Sir,
could you kindly explain it to me why intrinsic value would be equal to market value at the vesting date, please?
Thank you.
I understand that Sir but Kaplan texts is a bit confusing. Please can you explain it to me?
”When SARs are exercised, they are accounted for at their intrinsic value at the exercise date. The fair value of a SAR could exceed its intrinsic value at this date. This is because SAR holders who do not exercise their rights at that time have the ability to benefit from future share price rises.
At the end of the exercise period, the intrinsic value of a SAR will equal its fair
value. The liability will be cleared and any remaining balance taken to profit or loss.”Thank you.
Main point is that during exercise period FV will be greater than INTRINSIC VALUE. Remember from FM that options etc have time value as well
I’m sure you wouldn’t need to write the sentence in the exam.
Main point is that during exercise period FV will be greater than INTRINSIC VALUE. Remember from FM that options etc have time value as well
I’m sure you wouldn’t need to write the sentence in the exam.
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