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.
No one can write down a vision for your future, its your vision and future.
A credit score is a score that measures how likely you are to pay back a loan. If the score Is good that means they paid their loans on time. if the score is bad that means they aren't likely to pay any payments they are given through a loan. You can maintain a proper score by paying bills on time, when taking out loans pay the payments on time. and when you loan a car Pay. The. Payments.
Answer:
3.49%
Explanation:
Calculation to determine the rate of return on this investment
Using this formula
Rate of return=Monthly payment/Current value*100
Let plug in the formula
Rate of return = $4,990/$143,012 *100
Rate of return= 3.49%
Therefore the the rate of return on this investment is 3.49%
The correct answer is allocates resources efficiently and allows economic freedom.
The market system of economics is one where economic decisions and the pricing of goods and services are guided solely by supply and demand and there is limited to no government interaction in the economy. Because of this, two major virtues of the market system are that it allocates resources efficiently and allows economic freedom.
