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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 78.32-0.1%Jan 30 9:30 AM EST

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To: bambs who wrote (47773)2/2/2001 10:32:15 AM
From: Adam Nash  Read Replies (2) of 77400
 
Bambs,

The fact that options have "value" is not the argument. The argument is how to account for that value properly. In accounting, we do *not* expense opportunity cost. So, if I buy a computer for a company for $2000 that is really worth $4000, I do not expense the "$2000" I could have gotten by selling the computer.

The other difference is that companies do *not* have to buy the stock to fulfill their calls. They just issue the equity themselves. There is no cost, Cisco does not pay for Cisco shares, except via dilution, which is ALREADY accounted for.
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