Wednesday, October 12, 2016 11:17:03 AM
Let's look back to what was in the pickle jar. Capital surplus is made up of paid debt, retained earnings that is paid debt, tax rebaits that is part of account receivables, receivables from inventory sold that has not been collected that as they are both associated with the outstanding shares owed to the equity holders. This money is also used as credit and this takes me to the point of collateral and having the company fall into receivership should debt payments be missed.
Now you can sell that credit to a third party should that party have the means to take the write down on the issued credit. Now there is where you find the pickle jar and the pickles.
We know that all bank debt is backed by collarteral of your share holders equity. This equity can be raised if and should the par value of the stock is met. The way this is done is by the company putting in place a short strategy where all monies above par is put into a special fund, again a fund that is part of the outstanding shares " treasury stock ".
These funds are collected in a trust that the company used to protect those parties that got shorted below the strike price or IPO " initial pricing option ".
So the opposite hedging statagy is also used when when you take on a long position. Now to be a member of this club you have to buy in at par. Your position will be held in trust until the cycle is completed should the debt be settled.
No your banking contract that states all loans can be terminated at any time without a plausable reason but a years grace has to be given to the customer to find another means of repayment. An appointed bank representative can be appointed at know charge to the company. Should a payment be missed an appointed representative from the courts could also be appointed to work along side the bank representative.
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