The XL Co. issued 5,000 shares of P50 par preference shares 1,000 detachable warrants at P400,000. The warrants shall enable the holder to purchase 1,000 ordinary shares of P10 par at P25 per share. Immediately after the issuance of the share, the warrants are selling at P20 per share and the market value of the preference without the warrants is P60. The amount to be assigned to the share warrants should be: 25,000 None 30,000 20,000

The XL Co. issued 5,000 shares of P50 par preference shares 1,000 detachable warrants at P400,000. The warrants shall enable the holder to purchase 1,000 ordinary shares of P10 par at P25 per share. Immediately after the issuance of the share, the warrants are selling at P20 per share and the market value of the preference without the warrants is P60. The amount to be assigned to the share warrants should be: 25,000 None 30,000 20,000

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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Maese Industries Inc. has warrants outstanding that permit the holders to purchase 1 share of stock per warrant at a price of $28. a. Calculate the exercise value of a warrant at each of the following common stock prices: (1) $20, (2) $25, (3) $30, (4) $100. (Hint: A warrant's exercise value is the difference between the stock price and the purchase price specified by the warrant if the warrant were to be exercised.) If your answer is zero, enter "0". Round your answers to the nearest dollar. (1) $20 $ 0 (2) $25 $ 0 (3) $30 $ (4) $100 $ 2 72 b. Assume the firm's stock now sells for $20 per share. The company wants to sell some 20-year, $1,000 par value bonds with interest paid annually. Each bond will have attached 75 warrants, each exercisable into 1 share of stock at an exercise price of $25. The firm's straight bonds yield 11%. Assume that each warrant will have a market value of $2.5 when the stock sells at $20. What coupon interest rate must the company set on the bonds with…
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Sen Corporation warrants carry the right to buy 10 shares of Sen common stock at $11.00 per share. The common stock has a current market price of $11.75 per share. The intrinsic or minimum value of one Sen warrant is ________. A. $7.50 B. $0 C. $1.50 D. $15
Namjoon Corporation is authorized to issue 500,000 shares of Ordinary Share Capital, P50 par value. To comply with the required subscription of the Securities and Exchange Commission, assuming the minimum required subscription was received at P 110, how much subscription must be paid up?
On January 1 of the current year, Wick Company had 200,000 outstanding P100-par 12% convertible preference shares. There shares were originally issued at P250 each. On the same date, 20,000 preference shares were converted into 5,000 P800-par ordinary shares.On June 30, The 10,000 same class of preference shares are issued for P300 with one share warrants each. The fair value of the share and warrants on that date is P300 and P20.At yearend, P3,000,000 worth of dividends was declared. How much is the Share Premium - Ordinary arising from the conversion? How much is the balance of the Share Premium - Preference as of yearend?
4. During the current year, an entity issued 20,000 preference shares of P100 par value for P3,250,000 with 20,000 warrants to acquire 10,000, P50 par value ordinary shares at P60 per share. On the date of the issuance, the market values are 120 for preference and 10 for a warrant. If subsequently, 75% of the warrants were exercised, the amount that will be credited to share premium-issuance is?