The current number of shares outstanding for BioGene is 23 million and its current PE ratio is 49. Assuming a yearly growth in earnings of 50 percent for the next four years and a decline in the PE ratio to 25, this implies a valuation of $962 million in 2022. Assume InterWebs earnings (after-tax profits) in 2022 are $6.3 million as stated in their business plan. Assigning a PE ratio of 50 of InterWeb in 2022, what will be their valuation?

What is Barbaras percentage ownership in each firm assuming nothing else has changes in shares outstanding for either of them in the next 4 years when the options vest Using the estimation value in question 1 for 2022, compare the offers in four years when the stock option will be fully vested.

Assuming Barbara remains employed until that time and she can sell her options in a cashless transaction on the same day, which stock option offers yield a larger gain?

Make sure to include the cost of the stock options and state all critical assumptions In addition to these compensation matters, what other factors would you suggest Barbara considering in making her decision?