Enterprise & Equity Value
In an acquisition, why might the dilution from options be even larger than the standalone TSM number suggests?
Model answer
In an M&A context you apply TSM at the OFFER price, not the current trading price, and you include ALL options that are in the money at the offer price (more tranches become in the money as the price…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Enterprise & Equity Value
- What's the difference between enterprise value and equity value?
- Why do you subtract cash when going from equity value to enterprise value?
- Why is enterprise value capital-structure neutral but equity value is not?
- A company issues $100 of new debt and holds the cash on its balance sheet. What happens to EV and equity value?
- Which valuation multiples pair with enterprise value vs. equity value, and why?
- How do you calculate fully diluted shares?