Solved

Lagos Inc Issued Bonds with Detachable Warrants for $ 5,000,000 (Par

Question 97

Multiple Choice

Lagos Inc. issued bonds with detachable warrants for $ 5,000,000 (par value) . The bonds have a present value of $ 4,934,400. The fair value of the warrants is determined to be $ 220,000. Using the relative fair value method, how much of the issue price should be allocated to the warrants?


A) $ 65,600
B) $ 211,200
C) $ 213,500
D) $ 220,000

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q89: Wang Inc. has $ 3,000,000 (par value),

Q90: Bissau Ltd. issued $ 4,000,000, 5-year, 8%

Q91: Use the following information for questions 55-56.<br>On

Q92: Which of the following would be classified

Q93: Convertible bonds<br>On December 1, 2020, Dango Corp.

Q94: Compensation expense resulting from a performance-type plan

Q95: Convertible bonds<br>Lachapelle Drilling Inc., which follows IFRS,

Q96: Use the following information for questions 18-19.<br>On

Q98: A call option is a right to<br>A)

Q99: Options pricing models<br>There are numerous options pricing