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Global sells $1,350,000 face value of convertible bonds at a price of 101.Global realizes proceeds of $ 1,363,500.The ten year bonds carry an interest rate(coupon rate) of 6% with interest paid semi annually. The market rate for equivalent non convertible bonds is 8%.The convertibility feature is not separable from the bonds is 8%.The convertibility feature is not separable from the bonds.The fair value of the bond component is $1,166,531 determined as follows:
a) PV of principal repayment $616,122.50
b) PV of interest payments 550,408.50
c) Fair value of bond at 8% $1,166,531
Calculate the average returns on small-company stocks and u.s. treasury bills. Calculate the variances and standard deviations of the returns on small-company stocks and u.s. treasury bills.
Discuss the impact of the newly-passed Financial Regulation Bill after the 2008 financial crisis on the bond rating agencies.
Bankston Corporation forecasts that if all of its existing financial policies are followed, its proposed capital budget would be so large that it would have to issue new common stock. Since new stock has a higher cost than retained earnings, Banksto..
Prepare the journal entries to record the above stock transactions.
The performance sharing plan also used two other critical values: the earnings from operations threshold amount and the earnings from operations stretch target. The targets for 1994 are shown here:
Prepare an amortization table use the straight-line method to amortize the premium.
In November and December 2007, Lane Co., a newly organized magazine publisher, received $90,000 for 1,000 three-year subscriptions at $30 per year, starting with the January 2008 issue. Lane included the entire $90,000 in its 2007 income tax retur..
Some investment projects require that a company increase its working capital. Under the net present value method, the investment and eventual recovery of working capital should be treated as:
If a company pays 8 percent interest to borrow $500,000, but is in an income tax bracket that requires it to pay 40 percent income tax, what is the actual net-of-tax interest cost that the company incurs?
(a) Determine the total estimated uncollectibles. (b) Prepare the adjusting entry at March 31, 2007, to record bad debts expense. (c) Discuss the implications of the changes in the aging schedule from 2006 to 2007
Prepare journal entries necessary for Crane during 2007 and 2008 to account for the transactions described above.
If treasury bills are currently paying 7 percent and the inflation rate is 3.8 percent, what is the approximate real rate of interest? The exact real rate?
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