Lawyer Hans Kristian Nygaard has written an article about Incentive schemes and the Black Scholes-formula which was published in the scientific journal Practical Economics & Finance, no. 4 2022.
The scientific journal is approved as a scientific publication channel at level 1 at NCD – Norwegian Center for Research Data (for both Norway and Sweden). The topic of the article is whether the use of the Black Scholes formula is applicable when valuating shares under an incentive scheme.
In the article, you will find a table for the Black Scholes formula, and a table with a modified Black Scholes formula when valuing incentive shares. In the modified Black Scholes formula Enterprise Value is the stochastic element, and nominal value of debt and preference capital at the laps of the vesting- and lock-up period, is the Strike Price.