Answer:
When bonds are converted into common stock____.
a. the market price of the stock and the bonds is ignored when recording the conversion.
Explanation:
This is because the conversion price, which is the price at which the convertible bond is converted into the common stock of the entity, is usually set initially when the conversion ratio is first decided on. Therefore, the market prices of the stock and the bonds are not taken into account when the conversion recording is being done.
Answer:
The answer is 324,050 shares
Explanation:
Stock dividends adds to the total number of shares outstanding while treasury stock(buy-back) reduces the total number of outstanding shares.
Beta issued a stock dividend of 4percent. Meaning the outstanding shares will increase by 4percent.
1.04 x 320,000 shares
=332,800 shares is the total number of outstanding shares before treasury stock.
Treasury stock issued on September 30, 2018. This means we have 3months(October 1 - December 31st, 2018).
So we have 3/12 x 35,000 shares
= 8,750 shares
Therefore, the appropriate number of shares to be used in the basic earnings per share computation for 2018:
=332,000 shares - 8,750 shares
= 324,050 shares
Answer:
An organization of workers that negotiates with employers, as a group, over wages and working conditions.
Explanation:
An inverted curve reflects the bond market's expectation for the Fed to cut rates down the line. The Fed normally cuts rates in response to an economic downturn, hence why an inverted curve could be a recession signal.
Answer:
Each 1000 par value bond will sell at issuance for $110.71
Explanation:
A zero coupon bond is a bond that does not pay interest and is issued at a heavy discount which is a compensation for the interest payment. The value of the zero coupon bond today is calculated using the present value of the face value of zero coupon bond. The formula to calculate the present value of the zero coupon bonds is,
PV = Face value / (1+r)^t
As the required rate is quoted in annual terms, we will divide it by 2 to calculate the semi annual required rate and multiply the time (annual) by 2 to calculate the semi annual periods in 25 years.
Semi annual required rate = 9% / 2 = 4.5%
Semi annual periods (t) = 25 * 2 = 50
PV = 1000 / (1+0.045)^50
PV = $110.70965 rounded off to $110.71