Exercise | December 2001

Exercise on Employee Stock Option Dilution

by Brian J. Hall


Discusses the effects of option dilution on stock prices and shareholder value. To simplify the example and isolate the complexity of option dilution, we make a number of simplifying assumptions.

Keywords: Stocks; Price; Employee Stock Ownership Plan; Business and Shareholder Relations; Complexity; Value;


Hall, Brian J. "Exercise on Employee Stock Option Dilution." Harvard Business School Exercise 902-162, December 2001.