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Show the computation please.    On January 1, 2022, Dirk Corporation issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of Dirk Corporation ordinary shares for every warrant at a speciied option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to 4 decimal places)

Show the computation please.    On January 1, 2022, Dirk Corporation issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of Dirk Corporation ordinary shares for every warrant at a speciied option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to 4 decimal places)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Show the computation please. 

 

On January 1, 2022, Dirk Corporation issued 1,000 of its January 1, 2017, 8%, 10 year, P1,000 face value bonds with detachable stock warrants at P1,250,000. Each bonds, which pays semi-annual interest every January 1 and July 1, carried 5 detachable warrants which entitle the holder to acquire one share of Dirk Corporation ordinary shares for every warrant at a speciied option price of P55 per share. Immediately after the issuance the prevailing market rate of interest is at 10% and the market value of the warrants was P30. How much is the equity component of the compound instrument? (Round off PV factor to 4 decimal places)

 

 

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