Stout was engaged to assist in the accounting for a financing transaction involving the issuance of over $150 million of securities by one of the largest natural foods distributors in the U.S. Stout determined the Fair Value of newly issued preferred stock, attached common stock, and identified embedded derivatives. The embedded derivatives related to the issuer’s call rights on the securities upon a future sale of the business, and given the structure of the call features Stout employed a lattice model with an underlying interest rate simulation to determine Fair Value. Following the completion of our work, the equity and liability components were recorded on the company’s balance sheet.

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