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Yellow Media Inc T.YLO



TSX:YLO - Post by User

Yellow Media Inc
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Comment by DoubleIndemnityon Dec 17, 2012 5:46pm
286 Views
Post# 20742040

RE: RE: RE: Capital Loss triggered on conversion?

RE: RE: RE: Capital Loss triggered on conversion?

 

The obvious question now becomes, what is the fair market value for this purpose?

Would it be the equivalent opening trade price on the first trading day of the new shares? (divided by 200)

 

I assume it woudl be the opening price on the first trading day. Let's say you have 400 common shares, for which you paid $400. In the exchange, you will get 2 new common shares and 1 warrant. If these open at $15 and $1 respectively, you will have a capital loss of $369. Your two new common shares will have a cost basis of $15 each, and your warrant will have a cost base of $1.

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