Enterprise & Equity Value
Your DCF spits out enterprise value, and you bridge to equity value. When you divide by TSM diluted shares to get a per-share value, there's a hidden circularity. What is it and how do you handle it?
Model answer
TSM dilution depends on the share price you assume - but the price is exactly what you're solving for. Strictly, options should be evaluated at your IMPLIED per-share value, not the current market…
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