In this workout, we're asked to calculate the equity purchase price for Frogner Well we can start by looking at the current share price, it's 34.15 but we can see that the company is offering a 25% premium above that So that's going to help us out with our first task, the offer price I'm going to say equals one plus the 25% And then multiply that by the current share price, so that will give us an offer price of 42.69 Next up, we need to calculate the number of diluted shares outstanding. This is going to include a couple of items We start with the basic shares outstanding and there are a 1,000 We're going to ignore the weighted shares outstanding, that's used for earnings per share or EPS calculations If I'm buying the company, I need to workout the number of shares now. Not the average number over the last quarter, half year or year Next up, we need to work out the dilution from options i.e because the company has options That means it may need to need issue new shares For this, we're going to use the treasury stock method and the treasury stock method says you start with the number of options outstanding, 220 And you then multiply that by the offer price minus the strike price We can see the offer price is above the strike price, that means the options are in the money and new shares need to be created And we then divide that by the offer price again That gives me 28 new shares, which are created because of the options Restricted stock units have a strike price of zero, that means because there are 100 restricted stock units We'll also need to create 100 shares So my diluted shares outstanding is the sum of the three cells above, giving me 1,128 Lastly then, the equity purchase price or equity value of this company is the number of diluted shares outstanding Times by the offer price, 48,152.5