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To: hueyone who wrote (62697)	1/16/2003 8:33:55 AM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

Excellent article. It really highlights the problem with not expensing options in the income statement.

To: hueyone who wrote (62697)	1/16/2003 9:36:02 AM
From: JakeStraw	Respond to of 77400

>>Not having to report options as compensation on the balance sheet has made companies look >>healthier than they are. So then when does the game stop??

To: hueyone who wrote (62697)	1/16/2003 9:48:40 AM
From: rkral	Respond to of 77400

hueyone, The author writes "Not having to report options as compensation on the balance sheet has made companies look healthier than they are." I think you know that is untrue. Shareholder equity is the same in either case. If options were expensed, Retained Earnings would be decreased by the (after tax) amount of that expense .. and Paid-In Capital would be increased by that exact amount. I believe that author meant to say "Income Statement". Ron

To: hueyone who wrote (62697)	1/16/2003 1:16:28 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 77400

Rational Pessimism: Predicting Equity Returns using Tobin’s q and Price/Earnings Ratios econ.duke.edu if you can't access the paper directly from the above link, go to duke.edu, then select "Working Papers" under "Research", then select "2002 Series" and look for the above title.