First some answers on a not so serious note:
1. Make an estimate, then multiply by 2, divide by 0.134263 and take the square root after adding Pi times the estimate times 12.345
2. Use a dart board and get some friends together to change the numbers to very high 8 figures. The one person that hits the same estimate range on the dart board 3 times is the closest to the estimate.
3. Take a wild swing and at the end of the report, cite the analyst firm IMTSU 2006 (I Made This Stuff Up).
There are 3 portions to the cost of resolving the options backdating issue:
1. Tangible costs – Regulatory fines and expenses – Internal investigation fees – Audit investigation fees – Documentation & restatement fees – Back tax dues and penalties and interest – Share holder lawsuits: Settlement fees, Defense fees
2. Intangible costs – Market capitalization loss – Employee turnover (not easy to guesstimate, but rest assured there will be some) – Internal & external communication expenses – (If delisted): stock appreciation opportunity costs
3. Variable expenses – Reduced revenue from customer becoming nervous about purchasing products
For the 3 companies we have worked with estimating $100 Million for a $3-5 Billion market capitalization in Tangible costs alone is on the average side.
options backdating | stock option backdating
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