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jwedgewood and AtlantaDon thanks for your responses. I agree that the ultimate degree of precision is not always beneficial, and can actually be harmful if you rely on it too much. Especially in this case where the quantified expense (using these assumptions) results in a change of only about 6% of book. (I think the second part, quantifying future grants, will prove very different though I haven't run the numbers yet. It'll be interesting to see.)

I guess this is just an instance where I'd like to understand something before I feel free to ignore it. It's also helpful in allowing me to better estimate that go/no-go point where options are just too much, because there's a fairly high probability that my intuition on those matters is wrong. In this particular instance, I might have initially made the assumption that having a 21% options overhang was too much and simply gone on to something else. I still might after completing the second part but based on the "debt" effect of options, it doesn't appear to be a significant drawback.

Just on a lark, I ran the numbers with a few different assumptions. If I accept the company's definition of expected life (2.7 years), I get only about a $9.5 mm ending hit. However, if I utilize the actual share price ($18) rather than my estimate, and my expected life of 7.7 years, my end result is $55.3 mm which is significantly different than the $23 mm I ended up with above. Which one to use? Well, it'll be hard to convince the market that my price is 'righter' than theirs, and yet as one who believes that intrinsic value does not equal market price, I must to some extent believe that the price will eventually approach what I believe its value to be. (And if it doesn't, to then question the assumptions which led me to my estimate). In other words, this one exercise alone doesn't make me feel like I have an exact value, but it does help me put a reasonable boundary on the outer ranges, so I can express with some confidence what that range is. Thanks again, and on to part 2.

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