Hello everyone,
I'm currently modelling a company thats issuing a ton of SBC, and I'd like to take it all into consideration for my 5-Year target price. I've used the treasury method to consider the dilution impact of all previously issued stock options, however this leaves me scratching my head for the treatment of stock options issued in the next 5 years.
I've forecasted the SBC expense which is linked to the operational expenses of the company, and from that determined an approximate amount of stock options granted based on todays share price. From there I've built a vested schedule with what remained outstanding, and what will be granted. The point where I'm stuck is determining how many shares will be bought back with the proceeds, and determining that proceed amount as I do not have an average strike price for these future options.
My question is two-fold:
1) Does my process make any sense? If so, how could I go about determining these proceeds? 2) Is there a method or industry best practice in dealing with this?
Thanks in advance for the help/insight!
