Question for calculating the equity value:
Options and warrants are accounted for using treasury method
How are restricted shares, RSUs, and Performance shares accounted for? (are they already a part of outstanding shares on 10k/Q?
thanks
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restricted stock are usually included in the share count (10-K/Q).
RSUs/PSUs are not included, so you need to add them to the basic shares outstanding count, but without proceeds.
X price is zero, and they are counted as "in the money" options outstanding.
So say a company has 100m shares outstanding, 6 million options oustanding with X price of $30, 3 million options outstanding with X price of $40, 50,000 of nonvested restricted stock, and 700,000 nonvested service based RSU's. Current share price is $36.
Potential shares = basic shares outstanding (100m) + in the money options outstanding (.7m + 6m) = 106.7m
Option proceeds = (6m * $30) + (.7m * $0) = $180m (no proceeds from RSU's, implied average strike price is $26.87)
Shares repurchased = $180m/$36 = 5m
Diluted shares outstanding = 101.7m, so MV = $3,661.2m
thanks much!
How about '50,000 nonvested restricted stock units' - they should be treated similar to 700,000 service based RSU's right?
sorry i meant to put those as "50,000 restricted stock" to show that you don't count them. Will edit post
gotcha - thanks a bunch
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