What question did this study set out to answer?

The aim is to enhance the Hull-White model for pricing Executive Stock Options by improving convergence speed and modeling early exercise.

Accounting for executive stock options: a financial technology perspective

View Full Paper

Ask AI

Bookmark

Authors

Improves early exercise modeling and valuation accuracy in executive stock options, suggesting practical applications for financial professionals.

The aim is to enhance the Hull-White model for pricing Executive Stock Options by improving convergence speed and modeling early exercise.
Introduced enhanced Hull-White models based on Boyle-Lau and Tian for better convergence.
Allowed early exercise to be endogenously determined based on economic rationality.
Compared enhanced models against traditional Black-Scholes for accuracy and performance.
Aligned enhanced models with accounting standards in multiple regions.
The Hull-White-Boyle-Lau and Hull-White-Tian models achieved faster convergence compared to traditional methods.
The models improved accuracy in valuing stock options, especially under high-dividend conditions.
Enhanced approaches facilitated easier auditing and reproduction of results.

Byrne et al. (2026) studied this question.

View Full Paper

Ask AI

Bookmark

Improves early exercise modeling and valuation accuracy in executive stock options, suggesting practical applications for financial professionals.