valueofequityandthendividingbytheprimarynumberof
shares outstanding:
Cisco Google
Value of equity (in $ millions) $65,622.00$32,187.00
Value of options outstanding $2,058.00 $4,565.00
Valueofequityinsharesoutstanding
(in $ millions)$63,564.00$27,622.00
Primary shares outstanding 6,487 277.78
Value per share $9.80 $99.44Theinconsistencyaverredtoearlierisclearwhenwecompare
thevaluepersharethatwehaveestimatedinthistabletothe
pricepersharethatweusedinthepreviousonetoestimate
thevalue of theoptions. For instance, Google’svalue per
shareis$99.44,whereasthepricepershareusedintheoption
valuationis$295.97.Ifwechooseiteration,wewouldrevalue
theoptionsusingtheestimatedvalueof$99.44,whichwould
lower the value of theoptions and increase thevalue per
share,leadingtoaseconditerationandathirdoneandsoon.
The values converge to yield a consistent estimate. The
consistentestimatesof valueareprovidedin thefollowing
table:
Cisco Google
Value of options (with current stock
price)$2,058.00$4,565.00
Value per share $9.80 $99.44
Value of options (with iterated value) $332.00 $1,501.00
Value per share $10.07 $110.47