Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 176.70

+1.6%

9:58 AM EST

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To: rkral who wrote (114180)	2/24/2002 2:46:29 PM
From: Peter J Hudson	Read Replies (2) of 152472

rkral, <<In other words, the value of a 10-year (call) option for an exercise price equal to the stock price is 87% of the exercise price on the date of grant, for a stock with 88% annual volatility, when interest rates are 5%.>> So if you want to account for the cost of the option grant do it when the grant is made and amortize it over the term of the vestment, as employee compensation. I still think the potential cost to the company is the difference between market price and strike price at the time of the grant, but either way the cost to the company is small. The wealth created for QCOM employee's by participation in company stock incentive plans is a success story not a scandal. Pete

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