Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
valueofequityandthendividingbytheprimarynumberof shares outstanding: Cisco Google Value of equity (in $ millions) $65,622.00$32, ...
Forbothfirms, theestimatedafter-taxvalueoftheoptions drops dramatically, leading to an increase in value per share. Ways of Inco ...
bythesameunitwhethertheoptionisout-of-the-moneyand hasthreeweekslefttoexpirationordeepin-the-moneyand hasfiveyearslefttomaturity ...
capitalization willalmost always eliminatethe bias in the comparison process. ILLUSTRATION 11.4: Adjusting P/E Ratio for Options ...
thesameadjustmenttothetrailing12-monthearnings,though the actual adjustment will probably be higher. Future Option Grants and Ef ...
compensation. The resulting increase in operating expenses will decrease operating income and after-taxcashflowsinfutureyears,th ...
Havingestimatedthevalueofexpectedfutureoptionissues, weareleftwith anotherquestion: Shouldweconsiderthis valueeachperiodasanoper ...
operating expenses to allowfor the factthat the expected effect of option issues in future periods will be smaller. Inmakingfore ...
Adjusted pretax operating income $5,786 million If we use this pretax operating income as our base for forecasting future operat ...
Thevalueofoptiongrants asa percentofrevenuesin the mostrecentyearis6.39percent.AswithCisco,welowerthis value to 3 percent over t ...
assumption. For instance, we could assume that options issuedwillrepresentafixedpercentoftheoutstandingstock eachperiod,andbaset ...
badnewsforstockholders.Infact,ifweviewoptiongrantsas compensation, they are part of the normal cost of doing business for a youn ...
option grants at fair market value. Such expensing, it is argued, will catch the market by surprise and lead to significantvalua ...
haveloweroptionexpensesthanexpected(giventheindustry standards) and decreasing at companies that have higher optionexpensesthane ...
should be indifferent between them. When managers are rewardedprimarilywithoptions,wealterthisbalance.Since options are rendered ...
Buildingonthethemethatoptionholdersgainwhenequity becomesmorerisky,wewouldanticipatemoredebtinfirms with more options outstandin ...
payoutstendtobeloweratfirmswithemployeeoptionsthan at otherwise similar firms without these options. 32 Kahle(2004)presents evid ...
trading them. These restricted stock issues have made a comebackinrecentyearsastheabusesofemployeeoptions havecometolight. InJul ...
rosefrom closetozeroin 2001 to 2.9645millionin 2002 before falling to 2.1 million in 2003. The switch to restricted stock is lik ...
is stock bonus plans, where the granting of shares is contingentonthefirmreaching aspecifiedoperatingtarget such as doubling of ...
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