The Valuation of Market-Leveraged Stock Units

Posted: 20 May 2019

See all articles by John C. Hull

John C. Hull

University of Toronto - Rotman School of Management

Alan White

University of Toronto - Rotman School of Management

Date Written: July 16, 2013

Abstract

A market-leveraged stock unit (MSU) is a form of employee compensation in which the number of shares received on the vesting date depends on the stock price at that time. MSUs have been proposed as a way of overcoming some of the drawbacks of stock options and restricted stock units. In this paper, we show how MSUs can be valued and discuss their properties.

Keywords: employee compensation, MSU, RSU, option, valuation

JEL Classification: M52

Suggested Citation

Hull, John C. and White, Alan, The Valuation of Market-Leveraged Stock Units (July 16, 2013). Rotman School of Management Working Paper No. 2294785. Available at SSRN: https://ssrn.com/abstract=2294785 or http://dx.doi.org/10.2139/ssrn.2294785

John C. Hull (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
(416) 978-8615 (Phone)
416-971-3048 (Fax)

Alan White

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-3689 (Phone)
416-971-3048 (Fax)

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