MJR,
This is how they would calculate it in their meeting. Marketcap of BRO $20mill, how much is your company worth $500K, ok we'll give you 2.5% of the company or 15mill shares (based on 600mill shares). Now what shareprice would you like to use for the transaction?
I believe there is a formula on what that shareprice can be, upper range and lower range based on shareprice over last x months (unless it has changed recently).
So whilst there is a boundary, and there are tax implications on both sides of the equation, really they can call it what they want within reason. It is not a reflection on what they think the true shareprice currently should be, although, unless the new shareholders are looking to sell straight away, they wouldnt do the deal unless they saw some future for BRO (or just got jacked off at running a small business...been there, done that).
Cheers
Cheers
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