Explain how a financial statement model projects share-based compensation expense and share count, and how these feed into valuation

In a model, share-based pay expense is usually forecast as a share of revenue or from the vesting schedule in the notes, and it should be kept as a real operating cost, not added back as a non-cash item, because it transfers value to employees. Shares outstanding are forecast as last year's count plus shares issued on vesting and exercise, less shares repurchased. Buybacks are often used to offset that dilution. For options, the treasury stock method adds shares equal to options multiplied by one minus exercise price over share price (the period's average price, for diluted EPS). Valuation per share should use the diluted count. The trap is double counting: either expense the awards or dilute the share count for future grants, not both.