hybrid costing6

hybrid costing6 - Convertible bond analysis i . Diff: E...

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Convertible bond analysis Answer: b Diff: E i . Newage Scientific Company is considering issuing 15-year convertible bonds at a price of $1,000 each. The bonds would pay an 8 percent coupon, with semiannual payments, and have a par value of $1,000. Each bond would be convertible into 25 shares of Newage’s common stock. Without a conversion feature, investors would require an annual nominal yield of 10 percent. What is the straight-debt value of the bond at the time of issue? a. $ 850 b. $ 846 c. $1,000 d. $ 895 e. $ 922 Earnings per share Answer: e Diff: E ii . Northeast Company has 200,000 shares of common stock and 50,000 warrants outstanding. Each warrant entitles its owner to buy one share at a price of $20 before 2010. The firm’s basic earnings per share is $2.50. What is the firm’s diluted earnings per share? a. $2.50 b. $2.25 c. $1.50 d. $3.00 e. $2.00 Medium: Lease analysis Answer: a Diff: M iii . Votron Enterprises is considering whether to lease or buy some special manufacturing equipment to be placed on a new production
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This note was uploaded on 08/04/2011 for the course COMM 101 taught by Professor Sy during the Spring '11 term at USC.

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hybrid costing6 - Convertible bond analysis i . Diff: E...

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