Rupar Financial has an investment in 33,000 bonds of Anand Company that Rupar accounts for as a security available-for-sale. Anand bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $14 per bond, but Rupar believes the market does not appreciate the full value of the Anand bonds and that a more accurate price is $24 per bond. Rupar should carry the Anand investment on its balance sheet at: Multiple Choice $627,000, the midpoint of Nichols's range of reasonably likely valuations of Elliott. $792,000. $462,000. Either $462,000 or $792,000, as either are defensible valuations.
Rupar Financial has an investment in 33,000 bonds of Anand Company that Rupar accounts for as a security available-for-sale. Anand bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $14 per bond, but Rupar believes the market does not appreciate the full value of the Anand bonds and that a more accurate price is $24 per bond. Rupar should carry the Anand investment on its balance sheet at: Multiple Choice $627,000, the midpoint of Nichols's range of reasonably likely valuations of Elliott. $792,000. $462,000. Either $462,000 or $792,000, as either are defensible valuations.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Rupar Financial has an investment in 33,000 bonds of Anand Company that Rupar accounts for as a security available-for-sale. Anand bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $14 per bond, but Rupar believes the market does not appreciate the full value of the Anand bonds and that a more accurate price is $24 per bond. Rupar should carry the Anand investment on its
Multiple Choice
-
$627,000, the midpoint of Nichols's range of reasonably likely valuations of Elliott.
-
$792,000.
-
$462,000.
-
Either $462,000 or $792,000, as either are defensible valuations.
Expert Solution
Step 1
Data given:
No. of bonds=33,000
Quoted price of bond=$14 per bond
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