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puteri [66]
2 years ago
12

A corporation has issued 10% convertible debentures, convertible into 40 shares of common stock. The current market price of the

common stock is $25.25. If the bonds are trading at 5 points above parity, they are priced at:
Business
2 answers:
Vlad1618 [11]2 years ago
6 0

Answer:

$1,060.5

Explanation:

A corporation has issued 10% convertible debentures, convertible into 40 shares of common stock. The current market price of the common stock is $25.25. If the bonds are trading at 5 points above parity, they are priced at:

Parity price refers to the concept of comparing two assets equal in value

The bond is convertible into 40 shares of common stock. The parity price is  bond market value / 40 shares.

Parity = Equal value, hence one bond value =  one share value x 40 shares

Bond value 25.25 x 40 = $1,010

Therefore 5 points above parity = 1.05 x 1,010 = $1,060.5

sammy [17]2 years ago
5 0

Answer: 106

Explanation:

Here, we are looking at the price it becomes profitable for investors to convert their bonds into common stock.

Using Parity pricing, which allows us to make comparison between stock of equal value,

Current market price of common stock =$25. 25

Stock is convertible in 40 shares of stock, Therefore,

Parity price of bond = current price * number of shares

Parity price = 25.25 * 40 = $1010

Trading point = 5

1 point equivalent to $10

5 points = $50

This sums up to;

$1,010 + $50 = $1,060

Therefore, price per bond = 106

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Advocard [28]

Answer and Explanation:

Artists' lives have been changed by digital technology. This has created different schools of thought such as the "winner take all" theory, which claims that delivering high quality products at low cost will create a world where small differences in talent demand large differences in reward, and the "long tail"  theory, who claims that digital technology is creating a small portion of sellers that the market will adapt to, promoting low-cost products. These two theories are effective in different realities. However, the existence of both proves the change that programming and technology has been showing in entertainment and in the market.

7 0
3 years ago
J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $12
Allushta [10]

Answer:

Net income= $98,200

Explanation:

Giving the following information:

Division A:

The contribution margin of $79,300

Division B:

Contribution margin of $126,200.

The total traceable fixed costs are $72,400 and total common fixed costs are $34,900.

<u>To calculate the net operating income, we need to deduct from the combined contribution margin the fixed costs.</u>

<u></u>

Net income= (79,300 + 126,200) - 72,400 - 34,900

Net income= $98,200

7 0
2 years ago
The present value of a future amount of money is the amount ​that, if invested​ today, will grow to be as large as that ​ _____
svetlana [45]

Answer: A. Present; B. Taken; C. Future; D. Present

Explanation:

The present value of a future amount of money is the amount ​that, if invested​ today, will grow to be as large as that ​present amount when the interest that it will earn is​ taken into account.

The calculation that we use to convert a​ future amount of money to its​ present value is called discounting.

8 0
3 years ago
Which of the following personal property items has the HIGHEST specific limitation on coverage?
Charra [1.4K]

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<h3 /><h3>The properties having HIGHEST specific limitation on coverage.</h3>

A limit is the highest amount your insurer will pay for a claim that your insurance policy covers.

Some of these specific limits apply to a building or personal property at a single location.

From the listed option, the personal property items that have the HIGHEST specific limitation on coverage are jewelry, watches, and precious stones or metals because they are saved in a location, especially in banks

Learn more on specific limitations on coverage here: brainly.com/question/27015627

8 0
2 years ago
Which of the following best describes the purpose of making an investment
LUCKY_DIMON [66]

Answer:

b.) to use money to make more money

Explanation:

<em>The correct reason for making investments would be </em><em>to use money to make more more money.</em>

<u>A financial investment represents the act of allocating money to a process or an item in order to reap profit or generate income in the short term, the long term, or both. </u>

An investment can be in the form of purchased goods or services that can later be sold at a higher amount. It can also be an item or service that will be yielding immediate income while preserving all or parts of its original value.

The money made on an investment is referred to as gains o returns.

<em>The correct option is </em><em>b</em><em>.</em>

3 0
3 years ago
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