For each of the following pieces of information, state whether it should be included in. or excluded
Question:
For each of the following pieces of information, state whether it should be included in. or excluded from, the Facts section of an issues memo, assuming that the objective of the issues memo is to evaluate whether a new issue of preferred stock should be classified as a liability or as equity. Briefly explain your reasoning.
a. The fact that the issuer is a public company.
b. The key terms of the preferred stock, including its par value and any conversion or redemption features.
c. The anticipated size of the issuance, in dollars.
d. The date on which the issuance is expected to occur.
e. Background on the company and its primary sources of revenue.
f. The fact that the company entered into a similar transaction several years ago.
g. Detail about the counterparty (investor) who is expected to purchase a large share of the preferred stock issuance.
Expert Answer:
A To be included as the background about the issuer is required B Key terms to be included to deci... View the full answer
