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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (2937)	4/1/2004 8:49:45 PM
From: Boca_PETE	Respond to of 10065

Wally M: re:("FASB indicated that it preferred moving away from the traditional Black-Scholes-Merton method in favor of a less used BI-nomial method of valuing options, because the latter takes the impact of volatility in share price movements into account, but the former does not") No matter what valuation they use, no assets leave the corporate entity on stock option grant, stock option exercise, and upon employee resale of shares acquired from exercising stock options. Thus, an expense will be required to be recorded on the entity's books for an item that will never require a cash disbursement or the assumption of a liability. Such fake expense will be backed out in the entity's statement of cash flows. The king has no clothes ! P