Fully Diluted Value (FDV)

What Is Fully Diluted Value (FDV)?

Fully Diluted Value (FDV) is a financial metric used to measure the total value of a company. It takes into account all potential sources of capital, including debt and equity, as well as any options or warrants that may be outstanding. FDV is calculated by adding up the current market value of all shares outstanding plus any additional securities that could potentially be issued in the future. This includes convertible bonds, stock options, and other forms of dilutive securities such as preferred stock. The goal of calculating FDV is to provide investors with an accurate picture of what their investment would be worth if all possible sources were taken into consideration.

The calculation for FDV can vary depending on how many different types of securities are included in the equation. For example, some companies may include only common stocks while others might also factor in convertible bonds or preferred stocks when determining their fully diluted value. Additionally, certain factors such as share repurchases or dividend payments can affect the final number significantly since they reduce the amount available for new investments or acquisitions down the line. Ultimately though, understanding this important metric helps investors make more informed decisions about where to invest their money and which companies offer them better returns over time.

Market Cap vs Fully Dilated Value 

Market capitalization, or market cap, is a measure of the total value of all outstanding shares in a company. It is calculated by multiplying the current share price by the number of outstanding shares. Market cap can be used to compare companies within an industry and across different industries as it provides an indication of size relative to other firms.

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Fully diluted value (FDV) takes into account potential dilution from options, warrants, convertible securities and other instruments that could potentially increase the number of outstanding shares in a company. FDV gives investors more information about how much their investment would be worth if these additional securities were issued at current prices. This metric helps investors assess whether they are getting good value for their money when investing in stocks with high levels of dilution risk.

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