In Situations Where an Option-Pricing Model Is Required to Be

question 21

Multiple Choice

In situations where an option-pricing model is required to be used to determine the fair value of equity instruments granted IFRS 2 Share-based Payment:

• A) requires expected dividends to be taken into account when measuring the shares or options granted.
• B) allows the entity to choose the option-pricing model it wishes to use, but contains a number of factors that the option-pricing model selected must take into account as a minimum.
• C) requires the use of a binominal option-pricing model.
• D) requires the use of the Black-Scholes-Merton formula.