Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The fair value of convertible subordinated debentures is estimated using quoted market prices. Book amounts and estimated fair values of our financial instruments other
The fair value of convertible subordinated debentures is estimated using quoted market prices. Book amounts and estimated fair values of our financial instruments other than those for which book amounts approximate fair values as noted above are as follows (in thousands) Convertible subordinated debentures In addition, the company disclosed the following: 2024 2023 Book Amount $ 164,791 Estimated Fair Value $ 301,923 Book Amount $ 157,449 Estimated Fair Value $ 206,396 We have outstanding zero coupon convertible subordinated debentures which had a book amount of approximately $164.8 million and $157.4 million on September 26, 2024, and September 28, 2023, respectively. The debentures have an effective yield to maturity of 6 percent and a principal amount at maturity on March 2, 2038, of approximately $314.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.94 shares per $1,000 principal amount at maturity, representing 3,291,632 shares. The debentures may be redeemed at the option of the holder on March 2, 2028, or March 2, 2033, at the issue price plus accrued original discount totaling approximately $194 million and $247 million, respectively. Required: What amount of interest expense will Health Foods accrue on the debentures during fiscal year 2025? Note: Enter your answer in dollars not in thousands. Interest expense in the year of 2025
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the amount of interest expense that Health Foods will accrue o...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started