Like everything else it's just a negotiated figure. Arguments to and fro would include the likelihood of breakup (such as regulatory risk, unforeseen events), how disruptive the whole process is and also simply how desperate the buyer or seller is.

There's no modeling, it's a punishment or incentive. The intention is to inflict financial pain.

There’s a rough baseline of “cost to be acquired” and you start there, and do some doubling or other increases.

Basically, being acquired is a pain in the assets and you want it to be worth your while to pursue it, even if it falls through, otherwise the board is looking at getting replaced.