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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (41359)	10/23/2000 3:59:57 PM
From: GVTucker	Respond to of 77397

Gary, RE: If what you're saying is true and that CSCO issues new shares for employee exercises then there is a dilutive effect however the expense is???? According to my Black-Scholes calculator, 295mm shares (total options issued in 2000), 8 year average life per contract (per the 10-K), 5% risk free rate of interest (my guess), and 20% annual volatility (my guess) yields a price per option of $19 or so, giving the options program a total cost of $5.6 billion. That number is probably high--I always thought that Black-Scholes might not work well for very long term options. Still cutting that number in half still come out to around 50% of Cisco's total EBITDA for FY 2000. That's a big number.