"What valuation method would you consider appropriate in this...

"What valuation method would you consider appropriate in this situation...."

I have had some exposure as part of my working life to valuing similar things, and if this question were a serious one, the answer would have to be that any serious valuation exercise has to be based on a mix of methodologies, several of which are listed (albeit not used) in the RE report, including Discounted Cash Flow (DCF) model, Net Assets approach, and Orderly Realisation, Rationalisation and/or Takeover scenarios. Each will give rise to a different valuation, based partly on the assumptions made, and a rational weighting of these outcomes would then produce a final valuation. The Market Value will also be one consideration you would have in such an exercise, assuming the market for that security was fairly liquid.

Now, if you were the RE - which got paid only about $175k for its troubles (mainly to attend a couple of meetings and prepare a financial report at the end of the year for statutory purposes) - the easiest and least-cost approach for you would be to look at the security's market price at the end of the FY and use this figure in preparing the balance sheet, as every other method would involve considerable work and some expert input, which obviously the RE could not be bothered with.

However, if other methodologies were difficult for them to use, and they simply wanted an easy approach, the RE could - with equal validity - have also followed the Net Assets approach, which would have produced a value of $100 for each hybrid (given the company's net assets are still above the value of hybrids' total par value and hybrids rank higher than the ordinary shares).

By simply picking the market price of $7 at the close of FY and not doing a proper valuation exercise, the RE has demonstrated both a lack of competence and a lack of duty of care or interest in protecting hybrid holders' interests. I am afraid the current RE cannot be trusted by the hybrid holders in any deliberations moving forward.