Lavish Ltd. issued $4,000,000, six-year, 8% convertible bonds at par. Bonds pay interest annually. Each $1,000 bond is convertible into 100 of Lavish's common shares, which are currently trading at $25. The current market rate for similar non-convertible bonds is 10%. Assuming Lavish follows IFRS, the value to be recorded for the conversion option upon issuance of the bonds is: Question 4 options: $320,000 $0 $303,267 $348,421
Lavish Ltd. issued $4,000,000, six-year, 8% convertible bonds at par. Bonds pay interest annually. Each $1,000 bond is convertible into 100 of Lavish's common shares, which are currently trading at $25. The current market rate for similar non-convertible bonds is 10%. Assuming Lavish follows IFRS, the value to be recorded for the conversion option upon issuance of the bonds is: Question 4 options: $320,000 $0 $303,267 $348,421
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 3EB: Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual...
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Lavish Ltd. issued $4,000,000, six-year, 8% convertible bonds at par. Bonds pay interest annually. Each $1,000 bond is convertible into 100 of Lavish's common shares, which are currently trading at $25. The current market rate for similar non-convertible bonds is 10%. Assuming Lavish follows IFRS, the value to be recorded for the conversion option upon issuance of the bonds is:
Question 4 options:
|
$320,000 |
|
$0 |
|
$303,267 |
|
$348,421 |
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