574 
Options form a charge which will allow the option-holder to 
come in and share the future prosperity of a company; and this ol 
course, can only be done to the detriment of the holders of the 
shares already issued. In making the calculations it has been 
assumed, therefore, where shares stand at a premium, that the options 
will be exercised. But they have been valued not at the price which 
a buyer might be expected to pay on the Stock Exchange for a call ot 
shares, but only as the option affects the financial position of the 
company and its present shareholders— that is to say, if £i shares are 
quoted at £l 5s, it has been assumed that the option is worth 5s 
(equal to £l share, nothing paid). * 
After the average price per acre which the investor is paying for 
the whole planted estate has been ascertained, a further detailed 
calculation has been made to apportion the price rateably among the 
older rubber and the younger .rubber, according to age. It is suf- 
ficiently obvious that rubber which is now in bearing (yielding, it may 
be, a net profit of £150 to £200 per acre) is very much more valuable 
than immature rubber, which may not come into bearing until alter 
famine prices have disappeared. No attempt has been made to show 
what the rubber possessed by any company is actually worth ; but, 
for the purpose of maintaining a fairly correct ratio between the 
values of planted land of differing ages, a scale has been adopted such 
as is in use by professional rubber valuers, and the market price of 
the shares has been made to decide what is the market valuation ol 
each year’s planting according to the scale referred to. 
A concrete example of the results obtained and of the thorough - 
ness with which the table has been prepared may be given b> examin- 
ing the position of the Lanadron Company. According to the last 
balance-sheet, the assets and liabilities (after making the necessary 
adjustments for shares since issued, calls since paid, and for the 
purchase of Hollingbury) were as follows 
Liabilities. 
£ 
Assets. 
£ 
Capital at par 
Creditors 
Dividend for 1908 
% 
269,780 
5,443 
20,071 
Cost of estate, develop- 
ment, buildings, etc. ... 208,369 
Cash and realisable assets 86,925 
295,294 
295,294 
The £1 shares, however, are quoted at 4%, and the market 
of the estate may be shown by the following adjusted 
valuation 
balance- 
sheet : — 
£ 
269,780 shares at 4% = 
Creditors 
Dividend for 1908 
£ 
1 , 315,177 
5,443 
20,071 
Market valuation 0 f 
estate 
Cash and other assets ... 
1 , 253,766 
86,925 
1 , 340,691 
1,340,691 
