Black-Scholes v. Baroni-Adesi for Valuing Employee Stock Options

There are a variety of ways to calculate the Full Option Value (FOV) of employee stock options. The two most popular and relevant methodologies are Black-Scholes Merton and Baroni-Adesi Whaley. Detailed white papers on these methodologies can be found at the previous links, but the objective of this article is to simplify these complex formulas and explain the differences. .StockOpter.com can use either of these methodologies to calculate Full Option Value and Time Value. To change the methodology used by...

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