In this workout, we're asked to calculate the proceeds received by the company from management exercising their shares in each scenario. We're going to have three scenarios.

One, whether MOIC or multiple on invested capital is 1.25, and then another where it's 2 and another where it's 3.

We've got an entry share price of 100, and the first thing we're going to have to calculate is the strike price in each of those three scenarios.

Well, if the entry share price or the invested capital is 100 dollars or yen or Euros, and the multiple on invested capital is 1.25, then our strike price will have to be 1.25 multiplied by that 100.

I'm going to lock onto that 100 and I'll copy that down.

Fantastic. We see a higher strike price as we see a higher MOIC.

Now we've got the options under each of these scenarios here in scenario B, we've got some B options coming through. Under scenario C, we've got some C options coming through.

We've then got management shares and PE fund shares, but it's the options that we care about.

The management A options, well, we've got two of those options.

I'm going to multiply them by the strike price.

For that scenario, I'm going to lock onto the column D so that when I copy to the right, it doesn't go to column E, but I do want the 10 to go down to 11, and we get proceeds of 255.1.

As I copy it to the right, we pick up those slightly increased management A options at the same strike price, and the proceeds are gradually going up.

I can copy that down.

So for the management B options, we grab the management B shares and then multiply by the strike price, and I can copy it down again to grab the management C options.

So the total proceeds I sum up each column, and we can see that the numbers dramatically increase as we go through the three scenarios. So why is this? Well, first of all, as I go to scenario B, we can see that we're now dealing with a greater number of options or shares.

We go from 2 now to 6.4.

We also go from the strike price of 125 up to 200.

As we go to see, we now get to 13.6 shares or options, and a strike price of 300 for those later ones.

So the PE fund will be receiving greater proceeds from the management options as the.