What is the purpose of calculating fully diluted shares?

The purpose of calculating fully diluted shares is primarily to assess Equity Value. This involves considering all potential shares that could be outstanding in the future, including not only current shares but also those that may arise from convertible securities, stock options, warrants, and other financial instruments that can be converted into common stock.

This computation provides a more accurate representation of a company's equity valuation, as it reflects the total equity that could potentially be claimed by shareholders. By taking into account these additional shares, analysts and investors can better understand the potential dilution of earnings and equity value and make more informed investment decisions.

While understanding real-time trading prices, estimating future revenue from synergies, and evaluating management compensation are important aspects of financial analysis, they do not directly relate to the purpose of calculating fully diluted shares in the context of Equity Value assessment.