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My understanding for a conversion:
Dr Liability 100.0
Dr Share Options (equity) 5.2
Cr Share Capital 100.0
Cr Share Premium 5.2BUT what happens to the Share Options (5.2) if redemption is the route??
Would this imply that $5.2 million is therefore available for distribution of dividends!?
That would depend on local legislation. In the UK, for example, it would be distributable.
That is pretty neat when the $5.2 million is just an accounting adjustment! 🙂
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