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

To: GVTucker who wrote (61189)	8/30/2002 11:47:53 AM
From: Ira Player	Read Replies (1) \| Respond to of 77400

An equally important point is what model. Vesting is even more intractable than volatility, the weak point in most models. A mistake in the volatility you provide to a model of only a few percent can turn an apparent opportunity into a money pit... A mistake in the percentage of options that will be exercised is equally inaccurate. I agree with the position that the use of stock options as compensation needs to be accounted for in the analysis of a companies performance. I just don't agree with the methods being discussed. I don't like "estimates" directly applied to an income statement. It would be painful, but I'd rather see the difference between the "strike" price on the option and the market price on the day of exercise (discount) applied to the income statement. No estimates. No errors. An accounting of the fact that stock that could have been sold for $100 on the open market was sold for $20 and the company therefore "gave" $80 to the employee. Would any company do this...I don't think so...but accurate... Ira