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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: Joseph Beltran who wrote (61431)5/3/2002 3:48:09 PM
From: Math Junkie  Read Replies (1) of 99280
 
So it sounds like the effect is the same as if, at the time of exercise, the company issued new shares of stock at $45, and paid $44 of that to the employee. Of course, the tax situation would be different.

It seems like it would be easy enough to determine the expense to be charged to the books at the time of exercise, but how would you determine the charge at the time of the grant, since the exercise price is still unknown? It seems like whatever number people come up with is going to be largely fictitious.

I also have to wonder what would be accomplished. As long as the same rules apply to all companies, what's the point? Are people just looking for a way to get companies to issue fewer options?
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