Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 36.08

-3.2%

3:59 PM EST

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To: COMMON_SENSE who wrote (174400)	5/8/2003 2:55:03 PM
From: Saturn V	of 186894

Why is dilution so hard to understand ? I am going to use round numbers for a hypothetical company X. For simplicity assume The Number of Company Shares Issued is 1 Million.( Should be Easy to find on any Income statement). Now find out number of outstanding options.[Easily available]. Assume that the number is 100,000. What is the present Earnings per Share ? Assume $1. What would have been the per Share Earnings if all the options were exercised immediately ? The answer is $1.00/1.1 = $0.89. [ The number of shares increased by 10%]. So by the dilution method the option expense is $0.11.

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