If the maker of a note does not pay at maturity, _________

Hrustic Company issued $750,000 of 12% convertible bonds at face value on an interest payment date several years ago. The face v

mina [271]

Answer: The bondholders decided to convert the bonds into common stock because they believed that getting $2250 today is worth more than $120 interest every year and a $1000 principal payment at the end of the bonds life.

Explanation:

1) In order to find out the number of bonds issued we need to divide 750,000 (Total ) by 1000(Face value of each bond).Total number of bonds issues therefore are 750.

2) A 12 percent convertible bond means that the bond pays a coupon of 120 ( 0.12 * 1000) every year.

3) Each bond is convertible into 25 shares , which means if one bond is converted into common stock, the bond holder can earn $1750. We calculate this number by multiplying the number of shares which is 25 into the current market price of the shares which is 70.

4) Also the company is offering an extra $500 per bond for converting it which means (500/25) an extra $20 per share.

5) So in total the bondholder by converting a bond and selling the shares he gets by converting it can earn $2250 per bond which they bought for a $1000 and gives them 120$ of interest every year.

6) SO to conclude the bondholders decided to convert the bonds into common stock because they believed that getting $2250 today is worth more than $120 interest every year and a $1000 principal payment at the end of the bonds life.

5 0

3 years ago

For the last two months thomas has been worried that something bad is going to happen. he can't pinpoint the source of this feel

yan [13]

Thomas may be suffering from generalised anxiety as far as the situation describes. Generalised anxiety disorder is defined as the excessive worrying of an aspect of life for a reason that is vague. They worry too much may it could either be family, studying, or even their health.

5 0

3 years ago

Becca has $500 to open a checking account. She wants an account with the lowest fees. She writes about 12 checks per month and h

Vinvika [58]

Answer:

Low balance checking account

Explanation:

Since Becca has a small amount of money, only $500, and only uses the ATM around 4 times per month, her best option is a low balance checking account. This type of checking account works very well for people that can only keep a small balance. Many banks don't charge fees for this type of account as long as you write only a limited number of checks, your bank statement is sent to you online, and you use only their ATMs.

The other types of checking accounts usually require much higher balances, and of the minimum balance is not met, then they will charge you a monthly fee.

7 0

3 years ago

Read 2 more answers

How can you assist the ProServices team in serving Pro customers in your

horrorfan [7]

Answer:

<h2>ProServices Team and Pro Customers</h2>

Assisting the ProServices Team in serving Pro customers in my department. Here I have assumed that my department manages and coordinates the relationship with Pro customers:

A. Pull orders for Pro customers in advance and have them ready to pick-up

B. Call Pro customers to maintain relationships and proactively seek out business

C. Monitor inventory levels to make sure key Pro items are in-stock

D. Price match other retailers to give Pro the best price

E. Identify pro customers and introduce them to the ProServices team.

Explanation:

“Pro” customers are a group of independent contractors, repair remodelers, specialty tradesmen, property management, and facility maintenance professionals who are afflicted to an organization offering ProServices. They are not the end customers. Between my organization and the customers, they are middlemen and women who are organized by my ProServices organization to offer specialty services to the general public in a professional manner that guarantees customer satisfaction and payment to the professionals for services rendered. In doing this, the ProService organization charges the Pro customers a fixed fee, which is deducted from the payments made by the end-customers.

8 0

3 years ago

Lightfoot Inc., a software development firm, has stock outstanding as follows: 15,000 shares of cumulative preferred 4% stock, $

Nana76 [90]

Answer:

Dividend Payment per unit

Year Common Dividend Preferred Dividend

1. 0 $0.3

2. 0 $0.5

3. $0.79 $1.6

4. $2.69 $0.8

Explanation:

Dividend distributed to preferred share is based on the predetermined rate associated with these share. When the dividend is declared preferred share dividend is paid first. The remainder is distributed between the common stockholders.

Value of Preferred share = 15,000 shares x $20 par value = $300,000

Dividend on Preferred share = $300,000 x 4% = $12,000 per year = $12,000 / 15,000 = $0.8 per share

Dividend Payment

Year Dividend Declared Common Dividend Preferred Dividend

1. $4,500 0 $4,500

2. $7,500 0 $7,500

3. $39,010 $15,010 $24,000

4. $63,110 $51,110 $12,000

Dividend Payment per unit

Year Common Dividend Preferred Dividend

1. 0 $4,500 / 15,000=$0.3

2. 0 $7,500 / 15,000=$0.5

3. $15,010/19,000 = $0.79 $24,000 / 15,000=$1.6

4. $51,110/19,000 = $2.69 $12,000 / 15,000=$0.8

Working

Year Dividend Declared Common Dividend Preferred Dividend Balance

1. $4,500 0 ( 4,500 - 12,000) = ( 7,500)

2. $7,500 0 (-7,500+7,500-12,000) = (12,000)

3. $39,010 $15,010 (-12,000+39,010-12,000) = 0

4. $63,110 $51,110 (63,110-12,000) = 0

3 0

3 years ago

If the maker of a note does not pay at maturity, __________.