Lognormal Distributions vs. Empirical Observation—a Defense of the Option Pricing Method

Business Valuation UpdateVol. 16 No. 3
March 2010
Neil J. Beaton, CPA/ABV, CFA, ASA
Scott L. Beauchene, CFA, ASA
David Dufendach, CPA/ABV, ASA
Stillian Ghaidarov


In their article, “Does Black-Scholes Overvalue Early-stage Companies?” (January 2010 BVU), authors Jim Walling and Cindy Moore challenge the use of the Black-Scholes option pricing method by business appraisers to allocate the equity value of a firm to i ...