Final 4 - Question 4 Needs Grading AtDecember 31,2011,...

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Question 4 Needs Grading At December  31, 2011,  Cordova  Leather's  liabilities  include the  following:  a. $15 million  of  noncallabl e 9% notes  were  issued for  $15 million  on August  31, 1992.  The notes  mature on  July 31,  2012.  Sufficient  cash is  expected  to be  available  to retire  the notes  at maturity.  b. $30 million  of 8%  notes were  issued for  $30 million  on May 31, 
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2007. The  notes  mature on  May 31,  2017, but  investors  have the  option of  calling  (demandin g payment  on) the  notes on  June 30,  2012.  However,  the call  option is  not  expected  to be  exercised,  given  prevailing  market  conditions.  c. $18 million  of 10%  notes are  due on  March 31,  2013. A  debt  covenant  requires  Cordova to  maintain 
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current  assets at  least equal  to 150% of  its current  liabilities.  On  December  31, 2011,  Cordova is 
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This note was uploaded on 02/29/2012 for the course INTERMEDIA 301 taught by Professor ?? during the Spring '12 term at Post.

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Final 4 - Question 4 Needs Grading AtDecember 31,2011,...

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