Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
Therearethreeformsofequitycompensation.Theoldestand mostestablishedoneistogivestockorequityinthefirmto management, employees, or ...
way in which these firms could attract and hold onto employees was by offering them noncash compensation, usuallywiththeonlycurr ...
EMPLOYEE OPTIONS Firmsuseequityoptionstorewardmanagersaswellasother employees.Therearetwoeffectsthattheseoptionshaveon valuepers ...
also toemployees allthrough theorganization, makingthe totalofoptiongrantsmuchlarger.Thethirdisthatsomeof the smaller firms have ...
While smaller companies have highernumbers of options outstanding than larger-market-cap companies, even the larger-market-cap c ...
year.Thisisbackedupbythenationalcompensationsurvey of the Bureau of Labor Statistics in March 2003, which reported that about 8 ...
stock options, reporton optiongrants atold economyand new economy firms from 1993 to 2001. Figure 11.2 summarizes their findings ...
2.Riskinessoffirm.Riskierfirmsshouldbemorelikelyto use equity options than safer firms. While most securities becomelessvaluable ...
Whilemuchofthisdiscussionhascenteredonthegrantingof optionsbypubliclytradedfirms,itisworthnotingthatthe useofequityoptionsiswide ...
at-the-money when issued. While maturities vary across firms,theseoptions aretypically long-term,witha 10-year maturityrepresent ...
Thepeakinthenonvestedoptionsaround$19reflectsthefact thatCiscohastradedaroundthatpricefrom 2003 to 2005 and that mostof theoptio ...
AsWarrenBuffettsaidin1998:“Ifoptionsaren’taformof compensation, what are they? If compensation isn’t an expense,whatis it?Andif ...
exercised.Consequently,theexpensesassociatedwithoptions are considered only when they are exercised. The tax effect of options h ...
value at thetime of the grant.When firms give away or receivesomethingofvalue,evenifthatvalueisanestimate, we have to record the ...
optionsarebelieved,expensingoptionswillbethedeathknell foryoungtechnologyfirms.Thesefirms,itisargued,willno longerbeabletoissuet ...
manyanalystsandinvestorswhostillrelyontheproverbial bottom line, which is accounting earnings. They will presumablygetabettersen ...
binomial lattice models, Black-Scholes, or Monte Carlo simulations to value these options. 5 Themodelscanbeadjustedtoreflectthes ...
As the use of employeeoptions as compensationexpands outsidetheUnitedStates,internationalaccountingstandards havealsohadtograppl ...
subsequentdecreasesintheshareprice(orlackofan increase) are not reflected in accounting for the deferredtaxassetuntiltherelatedc ...
firm; the exercise of options will increase the number of sharesatsomefuturedate,butexpectationsofthathappening willaffecttheval ...
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