Mgmt Options Pool Calculation in Basic LBO Model Example
Hello,
Can someone explain the theory behind the formula for cash out from mgmt options in the basic lbo model examples. The calculation is "new equity * [(mgmt %) / (1+mgmt%)]". Why do you need to divide by (1+mgmt%)?
TSM
The options were exercised and thus created more shares. The new number of total shares is captured by (1+mgmt%).
Et error hic sequi ea. Sapiente vel quae quisquam corporis omnis nisi dolor libero.
Assumenda esse quia non consequatur. Molestias est sint omnis nihil aut et fuga velit. Temporibus veniam perferendis sunt non est. Quia ea omnis nostrum minus sint.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...