Classification of financial instruments by the issuer
YO: issuer receive $1,000,000 in exchange for promise to pay... 14
Alternatives
Each of Y1 to Y10
Redemption
1. Ordinary shares
Declared dividend, if any
2. Mandatorily redeemable debentures
$60,000
$1,000,000 at Y10
fixed 'interest' at 6%
3. Same as 2 except:
$40,000
$1,000,000 at Y10
• 'interest' = 4%
• holder has option at maturity to convert
unless holder exercises
its conversion option
into 100,000 ordinary shares