An entity issued 2,000 convertible bonds. The bonds have a three-year term, and are issued at par with a face value of P1,000
An entity issued 2,000 convertible bonds. The bonds have a three-year term, and are issued at par with a face value of P1,000
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles
Section: Chapter Questions
Problem 1P: Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually...
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An entity issued 2,000 convertible bonds. The bonds have a three-year term, and are issued at par with a face value of P1,000 per bond. Interest is payable annually in arrears at a nominal annual interest rate of 6 per cent. Each bond is convertible at any time up to maturity into 250 ordinary shares. When the bonds are issued, the prevailing market interest rate for similar debt without a conversion option is 9 per cent. At the issue date, the market price of one ordinary share is P3. The issuance of convertible bonds increased the entity's equity by
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