Rubash Company recently issued two types of bonds. The first issue consisted of 20-year straight (no...

Rubash Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants attached) bonds with an 5% annual coupon. The second issue consisted of 20-year bonds with a 2% annual coupon with warrants attached. Both bonds were issued at par ($1,000). What is the value of the warrants that were attached to the second issue? Do not round intermediate calculations. Round your answer to the nearest cent.

Solutions

Expert Solution

jeff jeffy answered 4 months ago

Next > < Previous

Related Solutions

Bondigo Beverage Inc. is planning to issue two types of 20-year, noncallable bonds to raise a...

Bondigo Beverage Inc. is planning to issue two types of 20-year, noncallable bonds to raise a total of $8 million, $4 million from each type of bond. First, 4,000 bonds with a 10% semiannual coupon will be sold at their $1,000 par value to raise $4,000,000. These are called "par" bonds. Second, Original Issue Discount (OID) bonds, also with a 20-year maturity and a $1,000 par value, will be sold, but these bonds will have a semiannual coupon of only...

Bettanin Corporation recently issued 20-year bonds. The bonds have a coupon rate of 8 percent and...

Bettanin Corporation recently issued 20-year bonds. The bonds have a coupon rate of 8 percent and pay interest semiannually. Also, the bonds are callable in 6 years at a call price equal to 115 percent of par value of $1,000. The par value of the bonds is $1,000. If the yield to maturity is 7 percent, what is the yield to call?

. The Stylist Company issued 20-year bonds on January 1. The 10% bonds have a face...

. The Stylist Company issued 20-year bonds on January 1. The 10% bonds have a face value of $900,000 and pay interest every January 1 and July 1. The bonds were sold for $982,808 based on the market interest rate of 9%. Stylist uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Stylist should record which of the following journal entries when the interest is paid. (round to the nearest dollar)...

Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 5.3%. The bonds...

Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 5.3%. The bonds make semiannual payments. The face value of the bond is $1000. If these bonds currently sell for $1050, what is the yield to maturity as in APR?

On June 1, 2017, Griffin Company issued $294,000 of 20-year, 7% bonds at 112. The bonds...

On June 1, 2017, Griffin Company issued $294,000 of 20-year, 7% bonds at 112. The bonds were dated June 1, 2017, and pay interest on June 1 and December 1. Griffin Company uses the straight-line method to amortize the discount or premium. Required: Assuming that the entry to amortize the discount or premium to date has been made, what is the carrying value of the bonds on December 31, 2023?

Market Price of a Bond The company intends to issue 20-year bonds with a face value...

Market Price of a Bond The company intends to issue 20-year bonds with a face value of $1,000. The bonds carry a coupon rate of 9%, and interest is paid semiannually. On the issue date, the market interest rate for bonds issued by companies with similar risk is 12% compounded semiannually. Compute the market price of one bond on the date of issue. Click here to access the PV table and the PV of an ordinary annuity table to use...

Moon Software Inc. is planning to issue two types of 25-year, noncallable bonds to raise a...

Moon Software Inc. is planning to issue two types of 25-year, noncallable bonds to raise a total of $6 million, $3 million from each type of bond. First, 3,000 bonds with a 10% semiannual coupon will be sold at their $1,000 par value to raise $3,000,000. These are called "par" bonds. Second, Original Issue Discount (OID) bonds, also with a 25-year maturity and a $1,000 par value, will be sold, but these bonds will have a semiannual coupon of only...

Moon Software Inc. is planning to issue two types of 25-year, noncallable bonds to raise a...

Masters Corp. issues two bonds with 20-year maturities. Both bonds are callable at $1,050. The first...

Masters Corp. issues two bonds with 20-year maturities. Both bonds are callable at $1,050. The first bond is issued at a deep discount with a coupon rate of 4% and a price of $580 to yield 8.4%. The second bond is issued at par value with a coupon rate of 8.75%. a. What is the yield to maturity of the par bond and why? Why is it higher than the yield of the discount bond? b. If you expect rates...

On the first day of its fiscal year, Chin Company issued $16,800,000 of five-year, 4% bonds...

On the first day of its fiscal year, Chin Company issued $16,800,000 of five-year, 4% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 6%, resulting in Chin Company receiving cash of $15,366,859. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual...

Subjects