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mixer [17]
3 years ago
15

Supreme Industries issues the following announcement to holders of an issue of​ callable, convertible​ notes: ​"Prior to the clo

se of business on May​ 17, 2008, holders may convert their Notes into shares of Supreme Industries common stock at 29.45 shares of Supreme Industries common stock per​ $1000 principal amount of the Notes. Cash will be paid in lieu of fractional shares. On April​ 16, 2008, the last reported sale price of Supreme Industries common stock on the NYSE was $ 22.60 per​ share." If on May​ 17, Supreme Industries is trading as $ 24.30​, what is the value of common stock a holder of a​ $1,000 note would​ receive?
Business
1 answer:
777dan777 [17]3 years ago
4 0

Answer:

The value received by holder of $1,000 is $831.8

Explanation:

$1000 notes will get 33.95 shares which says 33 shares and teh cash equal to the 0.95 shares value. The convertible Bonds (CB) are converted at the will of holders into the shares or cash. The conversion price is the trading price of the share which is $24.20. Thus, a hoder of $1,000 will receive the following value:-

1) 33 shares at 24.50 which is equal to :-

 =33\times 24.50=808.5

2) The cash which is equal to 0.95 share. 1 share is valued at $24.50 thus 0.95 share will be valued at:-

 \frac{24.5}{1}\times 0.95=23.3

Thus total value of the common stock will be :

808.5+23.3=831.8

Thus, the value received by holder of $1,000 is $831.8

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For a company with significant uncollectible​ receivables, the direct​ write-off method is unsuitable because​ ________. A. it u
kumpel [21]

Answer:

The correctt answer is B. it violates the matching principle

Explanation:

The principle of correspondence, similar to the realization of income, is another considered important in the determination of accounting profits. According to the principle of correspondence, all costs and expenses related to the generation of income are made by doing the same with the latter. In other words, correspondence of income expenses is established, deducting those from these.

3 0
3 years ago
What is an incentive?
77julia77 [94]

Answer:

it acts as a stimulus to a market

Explanation:

an incentive is the extra money given to an employee for the constant hard work done,this can therefore act as a stimulus.

I hope this helps

8 0
2 years ago
Prepare journal entries to record the issuance of the bonds and the retirement of bonds. (Show computations and round to the n..
Vikentia [17]

Answer:

issuance entry:

cash                   2,850,000 debit

discount on BP     150,000 debit

         bonds payable           3,000,000 credit

--to record issuance--

bonds payable      600,000 debit

loss on redemption 30,000 debit

interest expense     56,250 debit

                 cash                     662,250 credit

                 discount on BP      24,000 credit

--to record redemption ---

Explanation:

proceeds at issuance : $3,000,000 x 95/100 = 2,850,000

the difference will be the discount.

Now, when the bonds are retired we have to check the weight:

3,000,000 --> 120,000

  600,000 --> 120,000/3,000,000 x 600,000 = 24,000

<u><em>cash outlay</em></u> 600,000 x 101/100 = 606,000

loss redemption

we pay 606,000

for bonds which are worth: 600,000 - 24,000 = 576,000

The loss is the difference.

then, we calcualte the accrued interest:

principal x rate x time

3,000,000 x 7.5% x 3/12 = 56,250‬

this will be an interest expense

as well as an additional cash outlay

5 0
3 years ago
DeWitt Company sells a kitchen set for $345. To promote July 4, DeWitt ran the following advertisement:
Triss [41]

Answer:

$296.7

Explanation:

Since the first four hours the kitchen set will have a discount of 12 %, plus another 2 % for the last of each hour.

Ingrid bought it at the 1 hour and 25 min, that means that she could get 12 % for the first hour plus another 2 % because of th end of the first hour.

So it will be:

14 % (345) = $48.3

To the total price: $345 - $48.3 = $ 296.7

Hope this info was useful

7 0
3 years ago
A $1,000 face value bond is currently quoted at 101.2. the bond pays semiannual payments of $28.50 each and matures in six years
goblinko [34]
Coupon rate is the yearly interest earned by a loan and it can be calculated with

C = \frac{i}{p}

where i is the annual interest and p is the par value of the bond or the initial loan amount.

For this particular case, since the semiannual payment is $28.50, then the annual payment is 2 x 28.50 = $57.00.

Thus, we have 

C = \frac{57}{1000} = 0.057

From this, the coupon rate is 0.057 x 100% = 5.7%.
Answer: 5.7%

7 0
3 years ago
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