On January 1,2023, MacGregor Ltd. issued 800, fiveyear,9% convertible bonds at par of $1,000, with...

50.1K

Verified Solution

Question

Accounting

On January 1,2023, MacGregor Ltd. issued 800, fiveyear,9% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $6. Similar straight bonds carry an interest rate of 11%. Calculate the PV of the debt component by itself. ex, answer should be around 700k

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students