Fully diluted shares outstanding technical question, need help
Can someone please explain to me how they get to 253.3 fully diluted shares outstanding for the target given this information? My thought process is the following.....
Value of stock options: (exercise price*outstanding options) = $100
Repurchased shares: (value of stock options/current share price) = 8.33
New shares: (outstanding options - repurchased shares) = 1.67
Fully diluted shares outstanding = 251.67
If someone could please explain to me where my thought process is going wrong that would be greatly appreciated. This is a problem out of Chapter 2 in Rosenbaum and Pearl
Options = 10
Strike = $10
Offer = $15
Dilution = Options - Options * Strike / Offer
Dilution = 10 - $10*$10/$15
Dilution = 3.33
Basic = 250
Basic + Dilution = 253.3
You are using the wrong share price
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