DCF - How to calculate total diluted number of shares if there is a dual class share structure?
I am trying to make a DCF for a Chinese-listed NASDAQ company. The share structure is set up as such:
The stock trades as an ADR. 1 ADR = 2 class A shares. The company has class A shares and class B shares. Class B shares are almost entirely owned by the company's parent Chinese entity, and class B shares have 15 times the voting rights as class A shares.
I am trying to calculate the total diluted number of shares outstanding so that I can divide my implied equity value to get my share price. My question is: what should I put as my denominator here? Should I just ignore the class B shares since they are not traded and not going to affect class A share price anyway? And should I be putting the total diluted number of ADRs instead of the number of shares as the denominator?
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