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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?


To: The Ox who wrote (4277)7/24/2002 1:18:16 PM
From: BWAC  Read Replies (1) | Respond to of 95531
 
Ok now, using some of the very same assumptions, theories, and principles of matching that expense to the revenue it produces come up with the assumed theoretical value of the option grant.

Devise a method to equally value the option that is equal across all industries and is equal across all ranges of stock volatility. Thus to maintain comparability between EPS among different companies.

Devise a further method to recognize a gain when previously expensed options expire worthless.

Rewrite the current GAAP rule that requires using fully diluted shares to calculate EPS. If its an expense, then it shouldn't be counted as an outstanding share until it is exercised. Result: Expense option reduces EPS. Outstanding shares (not fully diluted) increases EPS. All in the same period.

What is the net result? Very possibly Zero?



To: The Ox who wrote (4277)7/24/2002 1:22:15 PM
From: Cary Salsberg  Read Replies (1) | Respond to of 95531
 
ABC stock sells for $10/share the day they hire you. They grant you the option to buy 10,000 shares at $10/share with a 5 year expiration. How much expense should be charged to the income statement and when?