Question: You are valuing a technology company whose enterprise value is $800 million. The company has no debt, but considerable employee options, 10 million in total.

You are valuing a technology company whose enterprise value is $800 million. The company has no debt, but considerable employee options, 10 million in total. Based on option pricing models, you value each option at $6.67 per option. If the company has 40 million shares outstanding, what is the companys equity value and value per share? What is the value per share using the exercise value approach? Assume the average strike price equals $15.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

You are valuing a technology company whose enterprise value is $800 million. The company has no debt, but considerable employee options (10 million in total). Based on option pricing models, you...

Q:

You are valuing a technology company whose enterprise value is $800 million. The company has no debt, but considerable employee options (10 million in total). Based on option pricing models, you...

Q:

You are valuing a technology company whose enterprise value is $800 million. The company has no debt, but considerable employee options (10 million in total). Based on option pricing models, you...

Q:

You are valuing a technology company whose enterprise value is $800 million. The company has no debt, but considerable employee options, 10 million in total. Based on option pricing models, you value...

Q:

5. You are valuing a technology company whose enterprise value is $800 million. The company has no debt but considerable employee options, 10 million in total. Based on option-pricing models, you...

Q:

6 . You are valuing & technology company whose enterprise value is $ 800 million . The company has no debt , but considerable*$ ble employee options , 10 million in total . Based on option pricing...

Q:

You are valuing a technology company whose enterprise value is $80o million. The company has no debt but considerable employee options, 10 million in total. Based on option-pricing models, you value...

Q:

You are valuing a technology company whose enterprise value is $80o million. The company has no debt but considerable employee options, 10 million in total. Based on option-pricing models, you value...

Q:

You are valuing a organisation that has $2 hundred million in debt using probability-weighted-situation evaluation. You carefully version 3 situations, such that the resulting enterprise fee equals...

Q:

Using disclosures made in the 2015 Woolworths Annual Report, 2015 Woolworths CSR Report or current website for Woolworths (http://www.woolworthslimited.com.au) identify and provide 4 examples where...

Q:

1:B2B company for renting modern office space for small businesses is trying to decide which segment of customers it should enter. The options for it are divided into three segments: (a)...

Q:

Hellier Contractors paints interiors of residences and commercial structures. The firms management has established cost standards per 100 square feet of area to be painted. Direct material ($18 per...

Q:

A company has fixed costs of $ 5 0 , 0 0 0 , a selling price of $ 2 5 per unit, and variable costs of $ 1 2 . 5 per unit. What is the break - even sales quantity? Question 5 options: 2 , 0 0 0 units...

Q:

analyze and explain ways to manage systems, internal and external organizational data and structures to gain approval for change initiatives. Formal, coalition - building, and renegade approaches?...

Q:

Which one of the trends or challenges do you believe is the most relevant to the field of human relations?

Q:

Which persons contribution to the history of human relations do you find to be the most impressive?

Q:

General Motors was founded in 1908, prior to the birth of the human relations movement. Explain what would have been the focus of the CEO and management in those days given the prevailing theories of...