Question
Exercise B Bond with detachable warrant Warrants Common Stock Bond Amount 100 Detachable per bond 1 Par Value $100 Par Value $100 Fair Value (prior
Exercise B
| Bond with detachable warrant | Warrants | Common Stock |
| Bond Amount 100 | Detachable per bond 1 | Par Value $100 |
| Par Value $100 | Fair Value (prior selling) - | Fair Value $100 |
| Fair Value sale without warrant 102% | Fair Value (post selling) $30 | Fair Value $110 |
| Sale at par value $10,000 | 100% | Additional cash per share $ - |
Using the information above, prepare the Journal Entries for the borrower and the investor.
Actions to take:
- Selling of bond and detachable warrants
- Exercise of warrant
- Expiration of warrant
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
978-0538482387
