Hi there -

I understand how we compute the fully diluted vs. treasury method price per share for a public company (assuming repurchase of shares with the proceeds of the exercice of vested and in-the-money options).

However, in the context of a private company, how would that work? See an example below.

EBITDA = \$10m
Multiple = 10x
Enterprise Value = \$100m
Net Debt = \$50m
Equity Value = \$50m

Shares outstanding = 100
Options vested and outstanding = 20
Strike Price = \$250,000

So let's assume the company is being sold to an investor for \$50,000,000. What would the the proceeds paid to the shareholders and the ones coming from the exercice of the options?

My first guess is the following:

The Company will receive proceeds for the exercise of the strike : 20 * \$250,000 = \$5,000,000
The total number of shares will grow from 100 to 120
The price per share is therefore = (\$50,000,000 + \$5,000,000) / (100+20) = \$458,333

Shareholders will hence receive = 100 shares * \$458,333 = \$45,833,333
Option holders will receive = 20 options (now shares) * \$458,333 = \$9,166,667 minus the strike of \$5,000,000, i.e. \$4,166,667

Do you think the above maths are correct? Treasury Method Price per share would be \$458,333?

Thanks !!