Stock Option

The tech industrys birth option backdating scandal appears to be gathering steam. Last week, federal investigators announced criminal charges against spring executives of Brocade Communications Systems, and theyre hinting that more cases may be on the way. Meanwhile, Silicon Valleys top lawyers are scrambling to assuage their clients fears, and the U.S. protective covering and Ex diversity Commission has said that the investigation will put out beyond technology companies to other publicly traded outfits. Already, slightly companies throw away begun restating years price of financial results. To try to answer some questions about whats going on, CNET News.com has compiled the following list of frequently asked questions. Q: What is blood line option backdating? Backdating, which refers to the practice of altering the dates of grants, is a way for employees of a company to make additional money from impart options. age its not necessarily illegal, in many cases it could be. Q: How do stock options work? Stock options give the recipient the right to purchase a share of a companys stock at a price called the strike price, which is equal to the value of the stock on a certain date. If, for example, the strike price is $10 and the shares now trade at $15, each option would be worth $5.

(The options would be worthless if the stock fell to, say, $7.) moot of options as vouchers you can sell. If you have a coupon to purchase a Ferrari for $110,000, and the marketplace price of the car is $120,000, your coupon is worth $10,000. But if youre lucky enough to have a coupon that lets you buy a Ferrari for a mere $50,000, your piece of paper would have a far more handsome market value of $70,000. The same goes for stock options. If an executive is able to change the grant date of an option retroactively--for instance, to when the stock was trading at a lower price--the options become more lucrative. Thats what some corporations allegedly did. Stock options by themselves are not problematic or... If you call for to get a full essay, order it on our website: Orderessay

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