RE: RE: RE: RE: RE: RE: RE: Got another 2.5K A's t "An equity liability? Now that's an oxymoron if I ever heard one. How can you explain why they are listed on the liability side of the balance sheet?"
Look at the Yellow highlights. You just answered your own question. Where do you think a Liability should be accounted for? Now look at the Liabilities. Do you note that Debt and Preferred shares occupy 2 different lines? That would be because they are 2 different liabilities. The Preferred are an impairment (liability) against the Equity. If they are converted to commons then the difference between the fair market value of those commons and the $250,000,000 they received when they sold then becomes a taxable capital gain.
Not only will conversion not reduce your debt, it will in fact create a sizeable tax bill. ($2- conversion price)*(10,000,000 * 12.5)*(Tax rate).