I'm trying to estimate the value of stock options for a startup company which might get acquired in the near future. The problem is that I don't know how to incorporate the shares into the formula.
Let's say that the company is acquired for $100M
. If the company has 10M
authorized shares and 5M
outstanding shares what will be the value of an individual share? Do they have to buy 5M
or 10M
shares?
$5M
shares. They just have the right to do so. I'm not an expert in this regard that's why I'm asking here. I know that when you want to acquire a company you have to buy the shares but I don't know whether you have to buy the currently existing shares or all the shares which are authorized?