1. What is the number of shares outstanding at BioGene as of May 31, 2006? What is its current PE ratio? Why do you think it is higher than the current average of other bioinformatics companies (hint: consider the recent annual growth rates of revenues and profits)?
What is Barbara's percentage ownership in each firm?
Compare the firms in 4 years (i.e. 2010) when the stock options will be fully vested. Assuming Barbara remains employed until that time, which stock option offer is better? Make sure to include the cost of the stock options and state all critical assumptions.
In addition to compensation matters, what other factors would you suggest Barbara consider in making her decision?