Business Case Studies & Business Publications

Options Granting

Pfeifer, Phillip E...

Case

Options Granting

Pfeifer, Phillip E.; Jenkins, Robert

QA-0697 | Published January 31, 2007 | 5 pages Case

Collection: Darden School of Business

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The case provides stock returns, risk-free rates, and market returns associated with stock option grants issued from 1993 to 2004. The returns are 20-trading-day returns subsequent to the grant date. The grants are categorized as scheduled or unscheduled. Grants that could not be classified as either are not included in the data. The case also explains the efficient market hypothesis and its implications with respect to excess returns associated with the stock granting status (scheduled vs. unscheduled). The students are expected to use the data to test for the presence of excess returns...and use the results to make inferences about the granter's ability to select grant dates in order to generate excess returns.