NO SURPRISE HERE: AS ft U.S. companies faced the prospect of having to A deduct stock options expenses from their profits starting in 2005, they scrambled to cut their costs. All told, the value of options granted by businesses in the Standard & Poor's 500-stock index has tumbled, from 104 billion dollars in 2000 to 30 billion dollars in 2005, according to a new report by Credit Suisse Group analyst David Zion. Much of the drop has been straightforward: Companies have issued fewer options. But plenty have tinkered with the formulas they use to value them. That's possible because the expense recorded for an option is only an estimate based on assumptions about how long the option will be held, how volatile the stock is, and other factors. Come up with more favorable assumptions and the cost of the option declines.
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