How can I value the cash cost of options versus restricted stock?
This was selected as Best Answer I’m assuming that share count is being used in the valuation process as you’re talking about options and RSUs. RSUs can generally be assumed to eventually hit the share count assuming there isn’t a significant amount of forfeiture before vesting. Speaking just for myself and without spending too much time thinking about it (I am a CPA passed the CMA, CFM, and CFA exams so my quick thoughts are still usually quite accurate) the cash cost of the option would be the difference between the exercise price (how much the employee is theoretically paying) and the market price (as that is how much you would have to pay to repurchase that share to keep a stable share count). If you have a calculation of the value of the entire operations, then you might use your computed fair value per share as that is the theoretically correct market price. If you’re thinking more about valuing the option at time of issuance instead of exercise, you should probably just use your
