3DN Valuing Goods and Services for Internal Distribution in Shares
Valuing goods and services for internal distribution in shares
- If the CIE has an abundance of any given product – a bumper crop of tomatoes say – then the cost to the corporation is the shares issued to the people who planted, watered and harvested the tomatoes. We take the share cost divided by the pounds of tomatoes produced to arrive at the share price per pound. If it took 10 shares to grow 1000 pounds of tomatoes the share price per pound would be 1/100 of a share. If we considered that a shareholder is worth $15.00 an hour and spent one hour earning the share we might consider that pound of tomatoes cost the shareholder $0.15.
- What if it took 100 shares to grow 1000 pounds of tomatoes? In that case, the relative share price per pound calculates to $1.50 a pound – when, in season, tomatoes here go for about $2.00 a pound. To the shareholder, who spent 5 hours on a Saturday last May planting the tomatoes, there is really no cost because they wouldn't have been earning money then anyway. The five hours at 1/10 share per pound nets 50 pounds of tomatoes or a $100 value (although we would not expect the shareholder to spend all 5 shares on tomatoes).
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