1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
inna [77]
1 year ago
7

A convertible debenture callable at 101 is trading at 105. The debenture carries 4% coupon and is convertible at $25. The common

stock is trading at $27. If an investor bought the debenture and converted, the profit would be
Business
1 answer:
andrey2020 [161]1 year ago
8 0

If an investor bought the debenture and converted it, the profit would be $30.

First, calculate the number of shares each bond will convert to:

$1,000 (par) divided by $25 per share equals 40 shares per bond. With a market value of 105, each bond costs $1,050.

What is the stock parity price?

$1,050 divided by 40 shares equals $26.25 per share. The current market value of the stock minus stock parity price equals profit (or loss).

$27.00 − $26.25 = $0.75 per share × 40 shares = $30.

What is convertible debenture?

A long-term debt with the option to convert into stock shares after a predetermined amount of time is known as a convertible debenture. Common examples of convertible debentures include unsecured bonds or loans with little to no underlying security to back the commitment.

How are debentures converted to shares?

Equity shares are created out of a debenture. The holders of debentures are asked to return debenture certificates after sending them a notification of the conversion. The allocation of shares is handled by the secretary. Changes must be submitted to the Register of Charges after allotment.

Learn more about convertible debenture: brainly.com/question/16976826

#SPJ4

You might be interested in
The 2015 American Time Use survey contains data on how many minutes of sleep per night each of 10,900 survey participants estima
steposvetlana [31]

The population is the 10,900 respondents to the American Time Use Survey.

Explanation & Solution:

Statistics indicate that a large number of findings with similar features are related to in the population.

A sample is a subset from which it has been extracted.

"The American Time Usage survey for 2015 provides details about how many minutes of sleep every evening are assigned to each of 10,900 survey respondents.

An SRS of 100 participants (a plain random sample) has x = 514.4 minutes on average.

The size of the U.S. Time Utilization Survey is 10,900.

7 0
3 years ago
How are payroll taxes and user fees different?
fomenos
<span>Sometimes, a user fee is indeed a user fee. But other times it's not that at all; instead, it's a tax hike disguised by a misnomer.</span>
5 0
3 years ago
Which of the following statements about Treasury Stock is correct? Multiple Choice The balance in the Treasury Stock account inc
DedPeter [7]

Answer:

The balance in the Treasury Stock account reduces total Stockholders' Equity

Explanation:

Treasury stock also known as reacquiring stock refers to outstanding shares which were previously owned by a company which is then bought back by shareholders of that company. Treasury stock do not have much value but provide  means of  raising the price of share which in turn provides profits for investors.  

Treasury stock is normally recorded in the shareholders equity section of the balance sheet representing the number of repurchased shares from the open market, thereby reducing shareholder's equity by the amount paid for the stock

8 0
3 years ago
Melinda, who works in a jewelry store owned by Cindy, was picking up some gem stones for use in the store. On the way back to th
baherus [9]
Yes she should be held liable
6 0
2 years ago
On July 31, the bookkeeping account Supplies Inventory shows a debit balance of $1,000. A physical inventory taken on that date
Tanya [424]

Answer:

$200

Explanation:

When Supplies inventory are purchased, a debit is posted to Supplies inventory and a credit to cash account or accounts payable.

As the inventories are used, debit Supplies expense and credit Supplies inventory account.

Given that $1,000 was the debit in the books and $800 per count, it means the books balance needs to be written down to the physical balance. The difference to be posted

= $1,000 - $800

= $200

This will be done by

Debit Supplies expense  $200

Credit Supplies Inventory  $200

Being entries to record inventory used in July

4 0
3 years ago
Other questions:
  • In order for tqm to be successful, it is essential that most of the organization be _________.
    9·1 answer
  • Wesimann Co. issued 15-year bonds a year ago at a coupon rate of 7.5 percent. The bonds make semiannual payments and have a par
    11·1 answer
  • Calculate how much each of the following items is worth in terms of today's dollars using 180 as the price index for today.
    12·1 answer
  • Long-term debt ratio 0.3
    14·1 answer
  • 3. What do you think Firestone did wrong in their approach in South America and the United States? Why do you think the company
    15·1 answer
  • Which office do you contact to pay your bill at the University of the Cumberlands?
    5·1 answer
  • On December 31, 2018, Adelphi Corporation has outstanding 500 shares of $100 par value, 4% cumulative and nonparticipating prefe
    13·1 answer
  • What are two factors used to determine a credit score? Explain how they indicate good or poor credit. Write in complete
    12·1 answer
  • According to the law of supply - as the price of a good - service - or resource rises:______.
    11·1 answer
  • Nation Beta employing all its available resources nation alpha can produce either 800 units of chemicals or 1,600 units of cloth
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!