How is Equity / Enterprise Value Affected by Stock Option Exercise?

Hi all, a question I'm a little stuck on -

Let's say a company has 100 shares outstanding and current market price of $10. If 5 ITM options with a strike price of $5 were exercised, what would happen to equity value and enterprise value?

I'm confused when I think about this at a theoretical vs. market cap perspective. The exercise of the options results in proceeds of $25 for the company, so I would think equity value would be up by $25, but the $25 of cash would need to be stripped out of TEV as it's a non-operating asset, so the impact on TEV is neutral.

But then from a market cap perspective, those additional 5 shares are being included at the market price, right? So wouldn't equity value increase by $50 and then cash is only up by $25, so TEV is up by $25?

I'm just confused what the right approach is here - any insights appreciated!