Two million B share are issued with nominal value of 1 $ each. these are redeemable in two years time. Issuer has choice as to method of redemption, it may either be redeem for cash at their nominal value, or it may issue 1 million share in settlement.
A share are currently valued at 10 per share and lowest price of A share since its formation has been 5$ per share.
what will be share B classification?
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Linda- shares classification
6y ago#1
Two questions:
1. Does the instrument have a contractual obligation to deliver cash? No.
2. Will or may the instrument be settled in the issues own equity instruments? Yes
So I would go for equity.
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