medium · Investment Banking accounting
If a company grants Restricted Stock Units (RSUs) instead of stock options, how does this change the calculation of Fully Diluted Shares Outstanding under the Treasury Stock Method?
- RSUs are treated like debt-like obligations and are subtracted directly from the share count total.
- RSUs are added directly to the share count without a repurchase offset because they have no exercise price.
- RSUs are excluded from the FDSO entirely until they become fully vested and are later converted into cash.
- The TSM instead uses the fair value of the RSU at the grant date as assumed 'proceeds' used to repurchase shares.
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