Introduction to Business
OER 2018 Edition
ISBN: 9781947172548
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 16.4, Problem 1CC
Distinguish between debt and equity.
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Explain the value of knowing the debt/equity ratio.
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On July 1, 2021, after recording interest and amortization, BLUE Company converted ₱5,000,000 of its 12% convertible bonds into 50,000 shares of ₱10 par value ordinary share. On the conversion date, the carrying amount of the bonds was ₱6,000,000, the market value of the bonds was ₱6,500,000, and BLUE's ordinary shares were publicly trading at ₱150 per share. BLUE incurred ₱200,000 in connection with the conversion. What amount of additional share premium should BLUE record as a result of the conversion?
a. ₱ 6,000,000
b. ₱ 5,800,000
c. ₱ 5,300,000
d. ₱ 5,500,000
Identify and explain any THREE capital market securities withappropriate examples?
Chapter 16 Solutions
Introduction to Business
Ch. 16.1 - What is the role of financial management in a...Ch. 16.1 - How do the three key activities of the financial...Ch. 16.1 - What is the main goal of the financial manager?...Ch. 16.2 - Distinguish between short- and long-term expenses.Ch. 16.2 - What is the financial manager's goal in cash...Ch. 16.2 - Describe a firm's main motives in making capital...Ch. 16.3 - Distinguish between unsecured and secured...Ch. 16.3 - Briefly describe the three main types of unsecured...Ch. 16.3 - Discuss the two ways that accounts receivable can...Ch. 16.4 - Distinguish between debt and equity.
Ch. 16.4 - Identify the major types and features of long term...Ch. 16.5 - Compare the advantages and disadvantages of debt...Ch. 16.5 - Discuss the costs involved in issuing common...Ch. 16.5 - Briefly describe these sources of equity: retained...Ch. 16.6 - Distinguish between primary and secondary...Ch. 16.6 - Describe the types of bonds available to investors...Ch. 16.6 - Why do natural funds and exchange-traded funds...Ch. 16.7 - How do the broker markets differ from dealer...Ch. 16.7 - Why is the globalization of the securities markets...Ch. 16.7 - Briefly describe the key provisions of the main...Ch. 16.8 - How has the role of CFO changed since the passage...Ch. 16.8 - Describe the major changes taking place in the...Ch. 16 - In late July 2017, senior management at Equifax. a...Ch. 16 - What issues should executives of a company such as...Ch. 16 - How else could Blue Apron have raised funds to...Ch. 16 - Use a search engine and a site such as Yahoo!...
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- Companies A and B differ only in their capital structure. A is financed 30% debt and 70% equity: B is financed 10% debt and 90% equity. The debt of both companies is risk-free. a. Rosencrantz owns 1% of the common stock of A. What other investment package would produce identical cash flow for Rosencrantz? b. Guildenstern owns 2% of common stock of B. What other investment package would produce identical cash flows for Guildenstern?arrow_forwardIdentify different types of debt instruments and debt securities. Explain each.arrow_forwardHow does the debt instruments different to debt securities?arrow_forward
- If ABC Corporation will increase its authorized capital stock, the Corporation Code requires - a. the approval of the majority of the Board of Directors only. b. the approval of the majority of the stockholders and the Board of Directors. c. the approval of 2/3 of the shareholders of the outstanding capital stock as well as the approval of the Securities and Exchange Commission. d. the approval of the majority of the Board of Directors and approval of the shareholders holding 2/3 share of the outstanding capital stock.arrow_forwardWhat key strategies can organizations adopt to effectively manage bankruptcy and navigate through the challenges it poses, ensuring a smoother transition and potential recovery?arrow_forwardIdentify and describe the principal kinds of equity securities.arrow_forward
- _______ The result of dividing current assets by current liabilities.arrow_forwardInvestigate the Importance of Working Capital to Companies. (Include references to FASB proclamations, International Accounting Standards, and International Financial Reporting Standards.)arrow_forwardState the difference between a closed corporation and an open corporation.arrow_forward
- What conflicts of interest can arise between managers and stockholders? What are the assurances that investors and creditors seek from a firm?arrow_forwardWhat is the nature of liability of limited partners as to limited partnership debts or obligations? A. They are liable up to the extent of their capital contribution only B. They are liable pro-rata up to the extent of their separate assets after the partnership assets are exhausted C. They are liable pro-rata up to the extent of their capital contribution only D. They are liable equally up to the extent of their separate assets after the partnership assets are exhaustedarrow_forwardWhat is bankruptcy, and how can it be used as an unethical tool?arrow_forward
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