Controversial stock options for company executives may be much less costly to shareholders than current mathematical models suggest, according to research presented Jan. 5 by Tim Leung of Princeton’s Department of Operations Research and Financial Engineering.

At the annual meeting of the American Mathematical Society, Leung demonstrated that, in one scenario, stock options were worth about half of what they would be valued if one were to calculate their worth using a conventional method.

Leung and Ronnie Sircar, also of ORFE, submitted a paper on this research to the journal Social Science Research Network, where an abstract and a downloadable copy of the paper can be found.

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