Enterprise & Equity Value
What is the treasury stock method (TSM) and what is it used for?
Model answer
The treasury stock method estimates how many NET new shares are created when in-the-money options and warrants are exercised. The assumption: holders exercise and pay the strike price to the company…
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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?
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