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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?


To: Exacctnt who wrote (41065)4/4/2000 12:02:00 PM
From: Valley Girl  Respond to of 74651
 
Treasury stock and the printing press are the same financially. Shares held in treasury aren't counted on the denominator when calculating EPS. You're right about the exercise price, I forgot about that. But of course that's cash-positive for the company, too. So on balance the conclusion remains the same: an option exercise adds cash to the company's coffers, lowers its taxes somewhat thus raising earnings, and lowers EPS for all quarters going forward.