Luther corp issued 50000000 par value 8 convertible bonds

Reference no: EM13567687

1. Luther Corp. issued $50,000,000 par value 8% convertible bonds at 102. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at par. Expenses of issuing the bonds were $750,000.

2. Luther Corp. issued $35,000,000 par value 12% bonds at 101. One detachable stock purchase warrant was issued with each $1,000 par value bond. At the time of issuance, the warrants were selling for $6.50.

3. On October 31, 2012, Luther Corp. called its 10% convertible debentures for conversion. The $60,000,000 par value bonds were converted into 600,000 shares of $1 par value common stock. On October 31, there was $155,000 of unamortized premium applicable to the bonds, and the company paid an additional $355,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.

Reference no: EM13567687

Questions Cloud

In january 2002 six-month 182-day treasury bills were : in january 2002 six-month 182-day treasury bills were issued at a discount of 1.75 percent. what is the annual

Assume that the beta of the underlying assets is 2 how does : assume that a firm will always have enough money to pay off its bonds so the beta of its bonds is 0. the rate of return

Orange company manufactures calculators during the month : orange company manufactures calculators. during the month 25000 of raw materials were purchased and the warehouse

The risk-free rate is 4 the expected rate of return on the : the risk-free rate is 4. the expected rate of return on the stock market is 7. what is the appropriate cost of capital

Luther corp issued 50000000 par value 8 convertible bonds : 1. luther corp. issued 50000000 par value 8 convertible bonds at 102. if the bonds had not been convertible the

A project returns -5 if the stock market returns -10 and 5 : a project returns -5 if the stock market returns -10 and 5 if the stock market returns 10. what is the market beta of

An advantage of the internal rate of return basis for : an advantage of the internal rate of return basis for evaluating capital projects is the fact that itais easy to

Email at work please respond to the following from the : email at work please respond to the following from the video take a position whether an organization has the right to

Prepare an overview of what is revealed about the company : find the financial statements for a publicly traded company and examine its balance sheet and income statement. prepare

User Account

All Pages