Coca-Cola, Level 3 Communications, and the Washington Post Company Will Expense Options

Meanwhile, Coca-Cola, Level 3 Communications, and the Washington Post Company have announced that they will expense options. Coca-Cola is taking an innovative approach to valuing the options, asking two investment banks to help determine a price. "We're going to ask each of them for a price to buy 10,000 options and sell 10,000 options, and then we will average those four prices," Coke spokeswoman Kari Bjorhus said. The hypothetical options will have the same features as employee options. Chances are the formula will come in at less than a Black-Scholes approach because the investment bankers can figure in a discount for the lack of marketability of the options (the Black-Scholes formula, commonly used to value options for currently required footnote disclosures, was developed to price traded stock options, not untradable employee options).