In Determining the Amount to Be Assigned to the Equity

Multiple Choice

In determining the amount to be assigned to the equity component of a compound financial instrument,you must:

A) Add the face value of the financial liability to the fair value of the compound financial instrument as a whole.
B) Deduct the face value of the financial liability from the fair value of the compound financial instrument as a whole.
C) Deduct the face value of the financial liability from the face value of the compound financial instrument as a whole.
D) Add the fair value of the financial liability to the fair value of the compound financial instrument as a whole.
E) Deduct the fair value of the financial liability from the fair value of the compound financial instrument as a whole.