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Numerical example of BSOP and equity valuation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Numerical example of BSOP and equity valuation

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  • January 15, 2020 at 4:45 pm #558784
    gail98
    Member
    • Topics: 10
    • Replies: 4
    • ☆

    This is a numerical sum in latest Kaplan Study Text (page no.282)-Spark Company.
    Using Black Scholes option pricing model,derive a value for the total equity of EBMS.

    Why is that when the question says it is redeemable in 3 years time,the solution shows calculation of fair value for 4 years???

    I can’t understand this.Please explain.

    February 21, 2021 at 8:48 am #611164
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54478
    • ☆☆☆☆☆

    I am sorry but I do not have the Kaplan Study Text and so I cannot help you.

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