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ERRATA

ERRATA management’s aspirations to create value for shareholders. A GUIDE TO VALUING EMPLOYEE STOCK OPTIONS WITH A RELOAD FEATURE Thomas Hemmer, Steve Matsunaga, and Terry Shevlin At first glance, executive stock options with reload provisions appear to be more complicated than conventional options, and thus the valuation of such options would appear to be more difficult. But, as the authors demonstrate in this article, such reload options provide the employee with a dominant exercise strategy— namely, to exercise the option whenever it is “in-the-money.” And the fact that reload options will always be exercised simplifies their valuation by eliminating a major problem—that associated with employee’s risk preferences and uncertain early exercise— in valuing conventional options. THE EFFICIENT MARKET OFFERS HOPE TO ACTIVE MANAGEMENT Peter Bernstein This article provides an interesting resolution of the paradox at the heart of efficient markets theory: namely, in financial markets that appear to be becoming ever more efficient, with fewer and fewer fund managers able to beat the S&P 500, why do investors engage in active trading? Why not index? The key to the author’s defense of active management lies in its critique of economists’ concept of “equilibrium prices.” Please note the following errata http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Corporate Finance Wiley

ERRATA

Journal of Applied Corporate Finance , Volume 12 (2) – Jun 1, 1999
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Publisher
Wiley
Copyright
Copyright © 1999 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1078-1196
eISSN
1745-6622
DOI
10.1111/j.1745-6622.1999.tb00003.x
Publisher site
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Abstract

management’s aspirations to create value for shareholders. A GUIDE TO VALUING EMPLOYEE STOCK OPTIONS WITH A RELOAD FEATURE Thomas Hemmer, Steve Matsunaga, and Terry Shevlin At first glance, executive stock options with reload provisions appear to be more complicated than conventional options, and thus the valuation of such options would appear to be more difficult. But, as the authors demonstrate in this article, such reload options provide the employee with a dominant exercise strategy— namely, to exercise the option whenever it is “in-the-money.” And the fact that reload options will always be exercised simplifies their valuation by eliminating a major problem—that associated with employee’s risk preferences and uncertain early exercise— in valuing conventional options. THE EFFICIENT MARKET OFFERS HOPE TO ACTIVE MANAGEMENT Peter Bernstein This article provides an interesting resolution of the paradox at the heart of efficient markets theory: namely, in financial markets that appear to be becoming ever more efficient, with fewer and fewer fund managers able to beat the S&P 500, why do investors engage in active trading? Why not index? The key to the author’s defense of active management lies in its critique of economists’ concept of “equilibrium prices.” Please note the following errata

Journal

Journal of Applied Corporate Finance – Wiley

Published: Jun 1, 1999

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