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  • This Study Resource Was: Compound Financial Instrument

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    Pola Polz
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    Cassie Company issued P5,000,000 of 12% non-convertible 5-year bonds at 103, with each P1,000 bond including 30 detachable share warrants entitling the holder to purchase one ordinary share of Cassie Company for P50. The market value of each warrant was P4, and the market value of the bonds ex-warrants at issuance was 95.

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    Cassie Company issued P5,000,000 of 12% non-convertible 5-year bonds at 103, with each P1,000 bond including 30 detachable share warrants entitling the holder to purchase one ordinary share of Cassie Company for P50. The market value of each warrant was P4, and the market value of the bonds ex-warrants at issuance was 95.

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    © All Rights Reserved
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    24 views1 page

    This Study Resource Was: Compound Financial Instrument

    Uploaded by

    Pola Polz
    Cassie Company issued P5,000,000 of 12% non-convertible 5-year bonds at 103, with each P1,000 bond including 30 detachable share warrants entitling the holder to purchase one ordinary share of Cassie Company for P50. The market value of each warrant was P4, and the market value of the bonds ex-warrants at issuance was 95.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    Compound Financial Instrument

    At the beginning of current year, Cassie Company issued P5, 000,000 of 12% non-
    convertible 5-year bonds at 103.

    In addition, each P1,000 bond was issued within 30 detachable share warrants, each
    entitled the bond holder to purchase, for P50, one ordinary share of Cassie Company,
    par value,P25

    The quoted market value of each warrant was P4. The market value of bonds ex-
    warrants at the time of issuance is 95.

    m
    er as
    co
    eH w
    1. What is the carrying amount of the bonds payable?

    o.
    rs e
    ou urc
    A. 4,750,000

    B. 4,780,000
    o
    aC s

    C. 5,750,000
    vi y re

    D. 5,780,000
    ed d
    ar stu
    is
    Th
    sh

    This study source was downloaded by 100000827689665 from CourseHero.com on 06-26-2021 04:33:16 GMT -05:00

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