Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: rkral who wrote (67957)	5/21/2005 7:10:33 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

My counterpoint was (and is) that until the market price exceeds the exercise price, the dilution is not reflected in reported EPS. Are you saying my point is false? Now I will readily admit that my CPA knowledge is about 15 years out of date. However, from what I remember, Black Scholes will assign value to an option, even if it is out of the money. The reason is that the option has value, even if it is out of the money due to all the other assumptions that go into Black Scholes. As such, out of the money options are still dilutive to EPS. So in accounting for fully dilute EPS (or whatever you want to call it), out of the money options as well as in the money option dilute EPS further.