Now that we have calculated the target’s fully-diluted shares outstanding (“FDSO”), let’s compute enterprise value at the assumed purchase premium. The first step is to calculate net debt. Be sure to include as debt the current portion of long-term debt any convertible debt that is out-of-the-money (“OTM”), as determined using the transaction price implied by the assumed premium rather than the current market price. See the section on enterprise value for more detail on how to calculate net debt. The equity purchase price, which is added to net debt to yield enterprise value, is calculated by multiplying the transaction price by the FDSO.