DCF - Implied Share Price

Hey guys,

can s/o help me on the issue of circular references when it comes to calculating the implied share price in a DCF?

Subsequent to having discounted the projected FCFs and thereby calculated enterprise value, one has to determine the amount of fully diluted shares outstanding for calculating equity value. But where does the share price stem from by which I decide which tranches are “in-the-money”? Without knowing which tranches are exercisable, I can’t determine the amount of fully diluted shares and eventually the equity value.

I am aware that excel has an option to get rid of the problem - it’s more that I don’t understand the logic.

Why you are using an implied share price to check the moneyness. Use current market price.