medium · Investment Banking implied-share-price
Apex Corp has a share price of $40 and $100M basic shares. It has a convertible bond with a face value of $200M and a conversion price of $20.
For the purpose of an Enterprise Value bridge, how should this bond be treated?
- Exclude both the shares and the debt because they offset each other
- Include the $200M in total debt and do not add any shares to the count
- Add 10M shares to the count and also include the $200M in total debt
- Add 10M shares to the diluted share count and exclude the $200M from debt
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