Ann: Application for quotation of securities - RAC, page-107

Quote - "2. You don't need to buy on market. Just executing the 75c options and receiving the three $1.25 options is a cheap way to increase exposure."

@ SP of $1 ... 1:20 @ 75c - plus 3 for 20 @ 1.25 Cost for 100 heads $100, 5 converted 75c oppies $3.75, plus 15 $1.25 oppies "for free?"

So $103.75 for 105 shares plus 15 $1.25 oppies. Total "exposure 120 shares in effect (105 plus 15 oppies)

Buy 105 shares at 83.5c ... $87.7 ... OR Buy $103.75 worth at 83.5c = 124 shares.

So it is now "cheaper" to buy more exposure on market than at the day of the "bonus option" announcement when the SP was $1. Much "cheaper" now as the 83.5c shares are in the money all the way to $1.25 for 12% of the equivalent option based holding.