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blagie [28]
3 years ago
5

A customer bought a $1,000 par convertible subordinated debenture at par, convertible into common at $32 per share. If the bond'

s market price increases by 12.5%, the parity price of the stock will be:a. $32b. $36c. $37.50d. $38.40
Business
1 answer:
Pachacha [2.7K]3 years ago
5 0

Answer:

correct option is b. $36

Explanation:

given data

bought = $1,000 par convertible

convertible into common = $32 per share

bond market price increases = 12.5%

solution

we know that conversion ratio is fixed when the convertible security are issued and it does not change

we have bond is issued with a conversion price = $32

so as per each bond converting conversion ratio will be

conversion ratio =  \frac{1000}{32} = 31.25 : 1

so by every bond which is converted , then receives  = 31.25 share

so now bond price will be = $1125

parity price of the stock will as = \frac{1125}{31.25}

parity price of the stock  = $36

correct option is b. $36

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Required information Skip to question [The following information applies to the questions displayed below.]
Dimas [21]

Answer:

($148 million)

Explanation:

Calculation to determine Rapid Pac’s statement of cash flows, what were net cash inflows (or outflows) from investing activities for 2021

Cash flow from Investing activities ($ Million)

Proceeds from sale of land 12

Purchase of Investment (160)

Net cash inflows (outflows) from Investing activities ($148)

Therefore Rapid Pac’s statement of cash flows, what were net cash inflows (or outflows) from investing activities for 2021 will be ($148 million)

8 0
3 years ago
Green Cleaners Inc., a U.S.-based company that specializes in environmentally-friendly cleaning supplies, has production facilit
Anettt [7]

Answer: MULTINATIONAL

Explanation: MULTINATIONAL ENTERPRISE is any Enterprise that has its presence and does business in two or more countries. The presence can be in the form of Production facilities, Marketing facilities,joint ventures or even Franchise etc

Companies like Green Cleaners Inc., a U.S. company which has expanded to Spain and Poland are multinationals. Multinational organizations or enterprises have huge capital base through which they are able to acquire properties abroad.

3 0
3 years ago
Refer to the following financial statements for Crosby Corporation:
Brut [27]

Answer:

Crosby Corporation

a. Statement of Cash Flows

Operating activities:

Operating Income               $304,000

Add Depreciation                  300,000

Cash from operations        $604,000

Changes in working capital items:

Accounts receivable (net)       (5,000)

Inventory                                (70,000)

Prepaid expenses                    27,700

Accounts payable                 243,000

Notes payable                         0

Accrued expenses                 (18,900)

Interest expense                   (87,900)  

Taxes                                   (155,000)

Net cash from operations $537,900

Investing Activities:

Purchase of plant              (480,000)

Investments

 (long-term securities)         16,600

Financing Activities:

Bonds payable                      21,000

Preferred stock dividends  (10,000)

Common stock dividends (153,000)

Net cash flows                  ($67,500)

Reconciliation with cash:

Beginning Cash Balance   134,000                

Ending Cash Balance       $66,500

b. The book value per common share for both 20X1 and 20X2:

= Total stockholders’ equity/Common stock outstanding

         20X1                                    20X2

=  $ 1,445,400/150,000              $ 1,343,500/150,000

= $9.636                                     = $8.957

= $9.64                                       = $8.96

Market value = $8.96 * 3.6 = $32.256

c. If the market value of a share of common stock is 3.6 times book value for 20X2, P/E ratio =

P/E ratio = Market price/EPS

= $32.256/$ .34

= 94.87 times

Explanation:

a) Data and Calculations:

CROSBY CORPORATION

Income Statement

For the Year Ended December 31, 20X2

Sales                                                                          $ 3,880,000

Cost of goods sold                                                      2,620,000

Gross profit                                                                $ 1,260,000

Selling and administrative expense    656,000

Depreciation expense                          300,000           956,000

Operating income                                                       $ 304,000

Interest expense                                                              87,900

Earnings before taxes                                                 $ 216,100

Taxes                                                                              155,000

Earnings after taxes                                                      $ 61,100

Preferred stock dividends                                              10,000

Earnings available to common stockholders              $ 51,100

Shares outstanding                                                      150,000

Earnings per share                                                         $ .34

Statement of Retained Earnings

For the Year Ended December 31, 20X2

Retained earnings, balance, January 1, 20X2             $ 855,400

Add: Earnings available to common stockholders, 20X2 51,100

Deduct: Cash dividends declared and paid in 20X2     153,000

Retained earnings, balance, December 31, 20X2     $ 753,500

Comparative Balance Sheets

For 20X1 and 20X2

                                                        Year-End  20X1        Year-End  20X2

Assets

Current assets:

Cash                                                     $ 134,000                 $ 66,500

Accounts receivable (net)                     526,000                   531,000

Inventory                                                649,000                   719,000

Prepaid expenses                                   66,800                      39,100

Total current assets                        $ 1,375,800             $ 1,355,600

Investments (long-term securities)       99,500                     82,900

Gross plant and equipment         $ 2,520,000             $ 3,000,000

Less: Accumulated depreciation     1,450,000                  1,750,000

Net plant and equipment                 1,070,000                 1,250,000

Total assets                                  $ 2,545,300             $ 2,688,500

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable                           $ 315,000                $ 558,000

Notes payable                                    510,000                    510,000

Accrued expenses                              76,900                     58,000

Total current liabilities                   $ 901,900               $ 1,126,000

Long-term liabilities:

Bonds payable, 20X2                      198,000                     219,000

Total liabilities                            $ 1,099,900               $ 1,345,000

Stockholders’ equity:

Preferred stock, $100 par value   $ 90,000                   $ 90,000

Common stock, $1 par value          150,000                     150,000

Capital paid in excess of par         350,000                    350,000

Retained earnings                          855,400                    753,500

Total stockholders’ equity        $ 1,445,400               $ 1,343,500

Total liabilities and

 stockholders’ equity             $ 2,545,300              $ 2,688,500

Changes in working capital items:

                                                    20X1           20X2       Changes

Accounts receivable (net)      526,000       531,000        5,000

Inventory                                 649,000       719,000      70,000

Prepaid expenses                    66,800          39,100     -27,700

Accounts payable                $ 315,000  $ 558,000    243,000

Notes payable                         510,000      510,000   0

Accrued expenses                   76,900        58,000     -18,900

Bonds payable, 20X2          198,000         219,000      21,000

Investments (long-term securities) 99,500    82,900    16,600

Plant and equipment                    252,000  300,000  -48,000

5 0
3 years ago
Assume that salaried employees of Mayer, Inc., earn 2 weeks of vacation per year. The salaried employees earn a total of $160 ea
Dafna11 [192]

Answer:

Jan .7 Dr Vacation Benefits Expense $ 160

Cr To Vacation Benefits Payable $160

Explanation:

Journal entry for Mayer

Date Account Name Debit Credit

Jan .7

Dr Vacation Benefits Expense $ 160

Cr To Vacation Benefits Payable $160

( to record vacation pay expense.)

4 0
3 years ago
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vagabundo [1.1K]

Answer:

C

Explanation:

The consumers associated the saying with the Doritos brand.

7 0
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