Homework Answers
a. Value the bondholders would receive = Market Price of shares * Conversion Ratio
= $9.45 * 107.1507
= $1012.57
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You are the CFO of RealNetworks on July 1, 2008. The company's stock price is $9.45...
a. What is the value of the shares the bondholders would receive per $1,000 bond if...
a. What is the value of the shares the bondholders would receive
per $1,000 bond if they convert?
b. What is the value per $1,000 bond they would receive under
the call?
c. If you call the bonds, will the bondholders convert into
shares or accept the call price?
You are the CFO of RealNetworks on July 1, 2008. The company's stock price is $9.45 and its convertible debt is now callable. See the table below: Convertible Subordinated Notes Issued...
On January 1, 2018, Madison Products issued $40.3 million of 8%, 10-year convertible bonds at a...
On January 1, 2018, Madison Products issued $40.3 million of 8%,
10-year convertible bonds at a net price of $41.13 million. Madison
recently issued similar, but nonconvertible, bonds at 98 (that is,
98% of face amount). The bonds pay interest on June 30 and December
31. Each $1,000 bond is convertible into 30 shares of Madison’s no
par common stock. Madison records interest by the straight-line
method.
On June 1, 2020, Madison notified bondholders of its intent to call
the...
On January 1, 2021, Madison Products issued $40.1 million of 8%, 10-year convertible bonds at a...
On January 1, 2021, Madison Products issued $40.1 million of 8%, 10-year convertible bonds at a net price of $40.91 million. Madison recently issued similar, but nonconvertible, bonds at 98 (that is, 98% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the...
On January 1, 2021, Madison Products issued $40 million of 6%, 10-year convertible bonds at a...
On January 1, 2021, Madison Products issued $40 million of 6%, 10-year convertible bonds at a net price of $40.8 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the...
On January 1, 2018, Madison Products issued $41.4 million of 6%, 10-year convertible bonds at a...
On January 1, 2018, Madison Products issued $41.4 million of 6%, 10-year convertible bonds at a net price of $42.34 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison’s no par common stock. Madison records interest by the straight-line method. On June 1, 2020, Madison notified bondholders of its intent to call the...
On January 1, 2021, Madison Products issued $41.2 million of 8%, 10-year convertible bonds at a...
On January 1, 2021, Madison Products issued $41.2 million of 8%, 10-year convertible bonds at a net price of $42.12 million. Madison recently issued similar, but nonconvertible, bonds at 97 (that is, 97% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison’s no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the...
On January 1, 2018, Madison Products issued $41.5 million of 6%, 10-year convertible bonds at a...
On January 1, 2018, Madison Products issued $41.5 million of 6%, 10-year convertible bonds at a net price of $42.45 million. Madison recently issued similar, but nonconvertible, bonds at 98 (that is, 98% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2020, Madison notified bondholders of its intent to call the...
On July 1, 20x3, Anadarko Co. had twenty-year bonds payable outstanding with a face value of...
On July 1, 20x3, Anadarko Co. had twenty-year bonds payable outstanding with a face value of $500,000 and a carrying value of $480,000. Interest of 5 percent is paid semi-annually on January 1 and July 1. The bonds mature on July 1, 20x13, and each $1,000 bond is convertible into 20 common shares (par value = $10). Assume that discount or premium is amortized by the straight-line method. Give the journal entry needed under each of the following independent assumptions....
Bradley-Link’s December 31, 2021, balance sheet included the following items: Long-Term Liabilities ($ in millions) 7.0%...
Bradley-Link’s December 31, 2021, balance sheet included the
following items: Long-Term Liabilities ($ in millions) 7.0%
convertible bonds, callable at 102 beginning in 2022, due 2025 (net
of unamortized discount of $4) [note 8] $196 7.8% registered bonds
callable at 105 beginning in 2031, due 2035 (net of unamortized
discount of $2) [note 8] 65 Shareholders’ Equity 5 Equity—stock
warrants Note 8: Bonds (in part) The 7.0% bonds were issued in 2008
at 97.0 to yield 10%. Interest is paid...
Comet Products prepares its financial statements according to International Financial Reporting Standards (IFRS). On January 1,...
Comet Products prepares its financial statements according to International Financial Reporting Standards (IFRS). On January 1, 2018. Comet Products issued $80 million of 6%, 10-year convertible bonds at a net price of $81.6 million. Comet recently issued similar, but nonconvertible, bonds at 99 (that is. 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Comet's no par common stock. Comet records interest by the straight-line method....
a. What is the value of the shares the bondholders would receive
per $1,000 bond if they convert?
b. What is the value per $1,000 bond they would receive under
the call?
c. If you call the bonds, will the bondholders convert into
shares or accept the call price?
You are the CFO of RealNetworks on July 1, 2008. The company's stock price is $9.45 and its convertible debt is now callable. See the table below: Convertible Subordinated Notes Issued...
On January 1, 2018, Madison Products issued $40.3 million of 8%,
10-year convertible bonds at a net price of $41.13 million. Madison
recently issued similar, but nonconvertible, bonds at 98 (that is,
98% of face amount). The bonds pay interest on June 30 and December
31. Each $1,000 bond is convertible into 30 shares of Madison’s no
par common stock. Madison records interest by the straight-line
method.
On June 1, 2020, Madison notified bondholders of its intent to call
the...
On January 1, 2021, Madison Products issued $40.1 million of 8%, 10-year convertible bonds at a net price of $40.91 million. Madison recently issued similar, but nonconvertible, bonds at 98 (that is, 98% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the...
On January 1, 2021, Madison Products issued $40 million of 6%, 10-year convertible bonds at a net price of $40.8 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the...
On January 1, 2018, Madison Products issued $41.5 million of 6%, 10-year convertible bonds at a net price of $42.45 million. Madison recently issued similar, but nonconvertible, bonds at 98 (that is, 98% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2020, Madison notified bondholders of its intent to call the...
Bradley-Link’s December 31, 2021, balance sheet included the
following items: Long-Term Liabilities ($ in millions) 7.0%
convertible bonds, callable at 102 beginning in 2022, due 2025 (net
of unamortized discount of $4) [note 8] $196 7.8% registered bonds
callable at 105 beginning in 2031, due 2035 (net of unamortized
discount of $2) [note 8] 65 Shareholders’ Equity 5 Equity—stock
warrants Note 8: Bonds (in part) The 7.0% bonds were issued in 2008
at 97.0 to yield 10%. Interest is paid...
Comet Products prepares its financial statements according to International Financial Reporting Standards (IFRS). On January 1, 2018. Comet Products issued $80 million of 6%, 10-year convertible bonds at a net price of $81.6 million. Comet recently issued similar, but nonconvertible, bonds at 99 (that is. 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Comet's no par common stock. Comet records interest by the straight-line method....
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