What kind of cash flow should be when employees exercise stock option, CFO or CFF ? What kind of cash flow should be when the company repurchase stock, CFO or CFF ? From the point of adjustment view, how these cash flow should be adjusted ? Thanks.
when employees exercise the options the $ the co gets is cff…then when the co buys shares back to offset this it is also cff… this seems like a good match, but it is not… b/c initially when we expensed them is came from cfo…and any tax benefit goes to cfo ( ignoring any shortfalls/benefits) thus to better match, we should reclassify the net amount from our buyback to cfo… P.S. i have know to be dead wrong before
nikko0355 is right… We reclasiffy the difference to CFO to match the tax benefit created by the excerise of the stock options…