medium · Investment Banking
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 as debt-like obligations and subtracted from the share count.
- RSUs are added directly to the share count without a repurchase offset because they have no exercise price.
- RSUs are excluded from the FDSO until they are fully vested and converted to cash.
- The TSM uses the fair value of the RSU at grant date as the 'proceeds' to buy back shares.
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