How does the model value ESPP grants?
The ESPP BSM model is calculated using the simple and well established Black-Scholes-Merton formula. That formula is included in the documentation. It models both the Discount value (the upfront cost basis of the ESPP share including the discount as provided by the ESPP plan) and the Look-Back value of the shares following the Black-Scholes model. As the Look-Back value is heavily dependent on the expected volatility, the bundle includes our Volatility Tool for this purpose (see our Volatility Tool for more information).
