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What is the trend in the break-even point for operations, measured in sales dollars, over the last three years? What is the trend in the margin of safety?
Through the use of your own example, explain how a convertible bond works.
1) The impact of the call on base and diluted earnings per share (assume call forces conversion). 2) The consequences of your decision on financing flexibility
For each of the unrelated transactions described below, present the entry(ies) required to record each transaction.
Several analysts claim that Massey's incremental borrowing rate for a similar five-year note without the conversion option is 12%.
Madison Corporation had two issues of securities outstanding - Common stock and a 5 percent convertible bond issue in the face amount of $10,000,000.
Give the journal entries for each alternative. Explain any differences in accounting values between the alternatives
1) What is the conversion rate? 2) What is the conversion value? 3) What is the conversion premium (in dollars and precent)?
The discount in the connection with the issue was $18,000, which is being amortized monthly on a straight-line basis.
In its December 31, 2011, balance sheet, what amount of deferred income tax liability should Smith report? Show calculation.
Q1. Compute diluted earnings per share for 2007. Q2. Assume the same facts as those assumed for part (a), except that the 60 bonds were issued on September 1
Analyze the company’s convertible securities. Prepare the journal entries that would be needed, if they were converted.
In a reasonably efficient market, at the time of an announcement, market prices react to;
Following is the company's balance sheet prior to the purchase or leasing of the equipment.
What is the current value of the firm assuming the current dividend has not yet been paid?
If "interest payable" were credited when the bonds were issued, what should be the amount of the debit to "interest expense" on October 1, 2004?
If the price of common stock associated with a convertible bond is less than the conversion price:
Instructions: For the year ended December 31, 2012, Compute basic and diluted EPS
Determine the value of the straight debt component and the equity of the bond.
The interest rate on a straight bond of similar risk is currently 12 percent. a.) Calculate the straight bond value of the bond.
The spot rate of the British pound to the dollar is 1.68 ($/£). The 180 day forward rate is $1.71, the annualized forward premium is:
Q1. Compute diluted earnings per share for 2008. Q2. Compute diluted earnings per share for 2008 using the same facts as above
How would you adjust the analysis above to make valid comparisons between Sepracor and Bayer?
What are some of the advantages or disadvantages to the company using warrants or convertibles and vice versa.
Q1. What is the first option embedded in the convertibles worth, and how many underlying shares does it represent?