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MGT 224 Exam Winter 2019Page 1 of 19NAME (PRINT):Last/SurnameFirst /Given NameSTUDENT #:SIGNATURE:UNIVERSITY OF TORONTO MISSISSAUGAAPRIL 2019 FINAL EXAMINATIONMGT224H5SFinancial Accounting Theory & Policy IPeter ThomasDuration - 2 hoursAids: Calculator Model(s): Financial calculatorThe University of Toronto Mississauga and you, as a student, share a commitment toacademic integrity. You are reminded that you may be charged with an academicoffence for possessing any unauthorized aids during the writing of an exam. Clear,sealable, plastic bags have been provided for all electronic devices with storage,including but not limited to: cell phones, SMART devices, tablets, laptops, calculators,and MP3 players. Please turn off all devices, seal them in the bag provided, andplace the bag under your desk for the duration of the examination. You will not beable to touch the bag or its contents until the exam is over.If, during an exam, any of these items are found on your person or in the area of yourdesk other than in the clear, sealable, plastic bag, you may be charged with anacademic offence. A typical penalty for an academic offence may cause you to failthe course.Please note, once this exam has begun, youCANNOTre-write it.Instructions:This examination consists of nineteen (19) pages and five questions. Please answer directly onthe exam paper.Marks:Question 1______20 %Question 2_____25 %Question 3_____20 %Question 4_____15 %Question 5_____20 %Total______100
MGT 224 Exam Winter 2019Page 2 of 19Question 1 (20%)On January 1, 2018, $2,000,000 of five-year, 6% convertible bonds were sold by Company A(CA) for $2,100,000. Interest is payable on June 30 and December 31 each year. The bonds canbe converted in to 40,000 common shares at any time. At the time of issue, the market rate ofinterest for bonds of similar risk and duration without the conversion option was 7%.On January 1, 2019, the holders of $1,000,000 of the convertible bonds exercised theirconversion option and exchanged their bonds for 20,000 common shares. The market value of

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Term
Winter
Professor
N/A
Tags
Interest, Interest Rate, 1966, 1979, Finance lease

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