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Subject: 7.1 Converting to a 10-Share Corporation rss

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Mario Aguila
Chile
Puerto Montt
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The rules:
Quote:
Once Phase 3 has begun, a 5-Share Corporation that has operated at least once may be converted to a 10-Share Corporation at the beginning of the Corporation’s turn in the Operating Round. To convert a Corporation, the player takes the five shares that were previously face down in the Bank and turns them right side up. The Bank then pays the newly upgraded 10-Share Corporation five times its Current Market Value.


If I am the President and I have the President Certificate in a 5-share Corporation (40%), plus 1 share (20%)...after this transformation, I'll remain with only the 30% of the company (because the new value of my Certificates are 20% and 10% respectively) or I'll receive more certificates until my 60%, for a total of 5 certificates?
 
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Richard Pardoe
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Your holdings get diluted to 30% as you note. You will need to buy more shares to increase your holdings in the company.
 
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Mario Aguila
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Puerto Montt
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OK, and...with only the 30% of a corporation in the market, after this situation I have described, could operate? It is possible to be considered that it "floats"?
 
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Ricky Gray
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Hi, Mario. The company has already floated, so it can operate still. And note that if it has operated at least once already as a 5-share company, as per 7.1 it will receive further capitalization when converted (5x issue price).

Good luck.

Ricky
 
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David Hecht
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All responses correct, and--as an added thought--the reason it is required to operate once before converting (unless a 5-train is bought, of course) is to avoid having players leverage 10x capital with only 3x cash...
 
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