Drobetz, Wolfgang; Pensa, Pascal; Schmid, Markus M. - In: Corporate Governance: An International Review 15 (2007) 5, pp. 798-815
It is often argued that <link rid="b13">Black-Scholes (1973</link>) values overstate the subjective value of stock options granted to risk-averse and under-diversified executives. We construct a "representative" Swiss executive and extend the certainty-equivalence approach presented by Hall and Murphy (2002) to assess...