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Five years ago, you received one employee stock option (i.e., ESO) from your employer. On...

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Accounting

Five years ago, you received one employee stock option (i.e., ESO) from your employer. On the grant date, the stock price was $5.00 and the ESO was issued at the money. The stock has a one-year vesting period and matures ten years after the grant date. The stock price is and has always been very volatile and the expected volatility is the same today as it was when the option was granted. Today the stock price equals $5.00. The company does not pay dividends and is not expected to pay dividends within the foreseeable future. The current risk-free rate is very low and it is the same as it was on the grant date. Which of the following is most likely to be true?

-On the grant date, the options value was zero and today its value is zero.

-On the grant date, the options value was greater than zero but today its value is zero.

-On the grant date, the options value was greater than zero and today its value is lower than what it was on the date of grant.

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