An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Nai - Hui Su
National Chung Hsing University

Yi - Mien Lin
National Chung Hsing University

Wen - Chi Lai
National Chung Hsing University

Abstract: This paper examines the value of executive stock options when intellectual capital is taken into consideration. Three kinds of values of stock options are calculated by applying the modified Black-Scholes valuation model. In addition, the determinants of the value of stock options and the effect of intellectual capital are also investigated. Our results show that the value of executive stock options is significantly and positively related to executives’ risk-bearing ability, the growth opportunities of the firm, and executives' shareholding, but negatively related to executives’ tenure and institutional investors’ stockholding ratio. Moreover, the relation between these determinants and the value of stock options is stronger when intellectual capital is taken into account. Furthermore, we also document a positive relation between the value of stock options and the firm’s future growth value, especially when intellectual capital

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