Option Valuation

Adams Capital's market and valuation experience enhances a company's option valuation engagement. We work with our clients and their legal and financial advisors to ensure timely and accurate conclusions. For an outline of Adams Capital's option valuation engagement process, please see the "Option Valuation Process"

When calculating an option on a privately held company, the first step is to calculate the fair market value of the underlying stock. We interview management and review financial information, and then prepare our opinion of fair market value ("Option Valuation Process"). Once the FMV of the stock is completed, option assumptions must be determined including: the exercise price of the option, the underlying stock price volatility, the dividend rate expected on the underlying stock, the risk-free interest rate for the option term remaining, and the time until expiration (or the expected life) of the options. For a detailed explanation of option valuation models, see "Option Pricing Models".

Adams Capital issues a draft report, discusses any revisions with company management and advisors, updates the valuation study, and prepares a final option valuation report for presentation to the company board.

After the initial option valuation is completed, Adams Capital will gather updated interim financial information and provide quarterly valuation updates. We work with you to continually update and anticipate changes in the the marketplace and the subsequent impact on valuation.

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