用Free cash flow扣减share-based compensation是什么含义

问题如下：

Question An analyst gathers the following information about a company:

For use in a discounted cash flow model, the most appropriate estimate of free cash flow per share is closest to:

选项：

A.A.$15.99. B.B.$16.58. C.C.$17.30.

解释：

Solution

1. Correct because the model should deduct share-based compensation from free cash flow and use diluted shares. In this case, ($32,340 – $1,147) / 1,951 ≈ $15.99.

   Since share-based compensation is non-cash, discounted cash flow models used to value companies and their equity do not account for it by default. Accordingly, we need to modify the model to account for the effect of dilution from outstanding but unvested share-based awards and dilution from future share-based awards.

   Accounting for the first effect is straightforward: use diluted shares outstanding. The most pragmatic method to account for the second effect, dilution from expected future share-based awards, in a discounted cash flow valuation is to deduct share-based compensation from free cash flow.

2. Incorrect because it does not deduct share-based compensation from free cash flow. $32,340 / 1,951 ≈ $16.58.

3. Incorrect because it uses basic rather than diluted shares. ($32,340 – $1,147) / 1,803 ≈ $17.30.

Employee Compensation: Post-Employment and Share-Based

• explain how to forecast share-based compensation expense and shares outstanding in a financial statement model and their use in valuation