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Determine the value of the straight debt component and the equity of the bond.
For the year ended December 31, 2012, Compute basic and diluted EPS
The interest rate on a straight bond of similar risk is currently 12 percent. a.) Calculate the straight bond value of the bond.
What is the conversion price, CP, and the conversion value of the bond?
If equivalent bonds are currently yielding 10% to maturity, the pure bond value of this bond is (use semiannual analysis as presented in the text):
Contrast these types of bonds: (a) Secured and unsecured. (b) Convertible and callable.
The company had 100,000 shares of common stock outstanding throughout 2008. Compute diluted earnings per share for 2008.
In the 90-day forward market, 1 British pound equals $1.50. If interest rate parity holds, what is the spot exchange rate ($/£)?
Assume you want to compare Sepracor to an international company, like Bayer (which prepares its financial statements in accordance with iGAAP).
Solve diluted earnings per share for 2008, assuming the same facts as above, except that $1,000,000 of 6% convertible preferred stock was issued
What are some of the advantages or disadvantages to the company using warrants or convertibles and vice versa.
Problem: If you had a new firm of your own, which would you use to raise capital (warrants or convertibles)? And, why?
Using the book value method, would recording the conversion of the 6% convertible bonds into common stock affect earnings?
Question: In your opinion are convertible bonds a good investment?
Prepare the journal entries to record the conversion, amortization, and interest in connection with the debentures as of August 1, 2013
Why would an investor buy convertible bonds instead of the underlying stock when the conversion price is higher than the stock price?
- What is the conversion rate? - What is the conversion value? - What is the conversion premium
Give the journal entries for each alternative. Explain any differences in accounting values between the alternatives
What amount should Madison credit to the account "Paid-in capital in excess of par" as a result of this conversion
For each of the unrelated transactions described below, present the entry(ies) required to record each transaction.
Why were investors willing to pay $50 million for Masse's debt when the promised interest rate is only 2%?
The common stock is trading at $26 per share at the time of the conversion. Record the conversion of the preferred stock.
In your analysis, consider the following:The consequences of your decision on financing flexibility.
Through the use of your own example, explain how a convertible bond works.
The preferred stock pays an annual dividend of $5 per share. DiCenta' tax rate is 40%. Compute DiCenta' 2012 diluted earnings per share.