Author Topic: Stock buyout option  (Read 4938 times)

Drew

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Stock buyout option
« on: February 28, 2013, 03:35:27 PM »
Hello, Our team is in year 6 at the moment and we have an option to retire 250 shares of stock compared to 100 in year 5.
I was wondering how does the factor on stock buyout option change from year to year?
Is it (prior year)*2.5? does that mean in year 7 we'll be able to retire 250*2.5 = 625?

By the way, our equity is 111.2 mil and we have 10285 shares outstanding the stock price is 28.66.

« Last Edit: February 28, 2013, 03:55:52 PM by Drew »

WinBusinessStrategyGameTips

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Re: Stock buyout option
« Reply #1 on: February 28, 2013, 09:01:33 PM »
Now this is an interesting question.


Ever since approximately 2011, both BSG and GB have been limited to only buying 100 shares in year 6. Thus being able to buy back 250, is quite a bit different.... in fact I haven't seen this in years. You should post a screenshot.

The amount of shares the eventually becomes available is something that I attempted to write down, but every game is different, and usually throughout the game, there is a moment to sell shares, which changes the situation.

Now your game is explained differently, but across the board, I have seen approximately 100 shares in year 6, year 7 at about 200 shares, year 8 at 300. It becomes approximately 400 for 9, 10 and 11, and back down to 300 for 12, and 200 in year 13 with year 14 being 100.

If you do the rough math, that works out to be 2400 shares, out of the possible 2500 shares you can buy back over the course of the game. So it's a pretty bang on simplified explanation.

The 250 being 2.5x has nothing to do with the pattern in actuality.

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Drew

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Re: Stock buyout option
« Reply #2 on: March 01, 2013, 03:25:14 PM »
in fact I haven't seen this in years. You should post a screenshot.

Here you go