C is the real option value for a single stage project.
The value of options, on the other hand, generally has to be estimated.
Q: Isn't the value of options too uncertain to show on the books?
"Buying back stock is a nice way to prop up the value of options."
It is also unusual to cash out the expected value of options that had not been granted.
More recently, executives have argued that there is no good way to measure the value of options.
The option value will never be lower than its IV.
When volatility dies down, the value of options can sink.
His total package, including the present value of options, soared to $29 million in 1998 and $25 million the following year.
I also agree with the idea that option values should vary with the price of the stock.