Assignment$-3$ Assignment$-3$ Matt, a resident of Toronto, owns all the common shares of Beam Inc., a company he owns and operates. Matt is a custom home builder. He incorporated his business in $2005$ and has operated the custom home building business which now has $12$ employees from a facility in Milverton, Ontario. Matt$$s son has been employed full$-$time by the business for the past $5$ years since graduating from college. The adjusted cost base and paid$-$up capital of the common shares is $$300,000$ and the FMV is $$900,000.$ In the course of a reorganization of capital in Beam Inc., the following two packages of consideration have been offered to Matt by Beam Inc. in exchange for his common shares: ITA: $85,85\mathrm{.}1$ Package $($a$)$ Cash $$ $$10,000$ Bond $$ $$80,000$ FMV and LSC of Class A preferred shares $$ Redeemable and retractable at FMV $$ $$810,000$ Package $($b$)$ Cash $$ $$500,000$ FMV and LSC of Class A preferred shares $$ Redeemable and retractable at FMV $$ $$400,000$ Matt would like your advice on which option is better for him and whether there is a better option. After the reorganization, common shares of the company will be issued to Matt$$s $30-$year$-$old son for a nominal amount. Before you meet with Matt you want to: A$.$ Assess the situation. B$.$Identify the issues. C$.$ Analyze the issues D$.$ Advise$/$ Recommend $$ Assignment$-3$ Assignment$-3$ Matt, a resident of Toronto, owns all the common shares of Beam Inc., a company he owns and operates. Matt is a custom home builder. He incorporated his business in $2005$ and has operated the custom home building business which now has $12$ employees from a facility in Milverton, Ontario. Matt's son has been employed full$-$time by the business for the past $5$ years since graduating from college. The adjusted cost base and paid$-$up capital of the common shares is $\backslash (\backslash$$ $300,000\backslash )$ and the FMV is $\backslash (\backslash$$ $900,000\backslash ).$ In the course of a reorganization of capital in Beam Inc., the following two packages of consideration have been offered to Matt by Beam Inc. in exchange for his common shares: ITA: $85,85\mathrm{.}1$ Package $($a$)$ Cash $-\backslash$$$10,000$ Bond$-\backslash$$$80,000$ FMV and LSC of Class A preferred shares $-$ Redeemable and retractable at FMV $-\backslash (\backslash$$ $810,000\backslash )$ Package $($b$)$ Cash $-\backslash$$$500,000$ FMV and LSC of Class A preferred shares $-$ Redeemable and retractable at FMV $-\backslash$$$400,000$ Matt would like your advice on which option is better for him and whether there is a better option. After the reorganization, common shares of the company will be issued to Matt's $30-$year$-$old son for a nominal amount. Before you meet with Matt you want to: A$.$ Assess the situation. B$.$ Identify the issues. C$.$ Analyze the issues D$.$ Advise$/$ Recommend