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Politics : Ask Michael Burke

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To: Freedom Fighter who wrote (58219)4/30/1999 2:11:00 PM
From: Michael Bakunin  Read Replies (1) of 132070
 
The difference is because of the way grants are charged off against pro-forma earnings. FASB left companies too much leeway even in the footnotes, but most charge off the value of vested options, while the tables show granted options. Since it is possible employees will leave before options vest, I grudgingly accept the former method, though I often adjust much as you do. I have also been known to apply a correction to the values using the implied volatilities from a company's longest LEAPs instead of the volatility presented by management. -mb
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