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

To: willcousa who wrote (61162)	8/29/2002 5:21:44 PM
From: hueyone	Read Replies (1) \| Respond to of 77400

I don't think there is a valuation model. If companies do not expense stock options on the income statements using a fair value method, they are required to show the pro forma impact of expensing stock options on income in the footnotes of the 10K using a fair value method. From FASB statement 123---Fair value is determined using an option-pricing model that takes into account the stock price at the grant date, the exercise price, the expected life of the option, the volatility of the underlying stock and the expected dividends on it, and the risk-free interest rate over the expected life of the option. fasb.org Best, Huey

To: willcousa who wrote (61162)	8/29/2002 5:33:03 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

willcousa, RE: How do you value an option with a restriction that prevents vesting until an employee has put in 7 years with the company? Some say it has little or no value on the date granted and I would lean that way. Sorry, that is absolute bunk. Getting this on topic, an at the money option Cisco that does not vest until seven years from now would be worth several dollars per share today. That's much more than little or no value, particularly for a $14 stock.