这是level 1 , financial reporting有关的题。
题目解答的意思是，如果10 million exchangeable bond被换成share,
liability会被减少10 million;
equity的话，就得看有没gain or loss.
我不懂的地方在， equity不是也得先增加10 million吗？ 然后再看有没gain or loss, 在10 million基础上再加减之？
求高人指点。谢谢。
题目如下：
Q3. Cameron Inc. has $10 million of bonds outstanding that are convertible into common shares. The current price per share is $44 and the stated conversion price is $49 per share. Cameron also has exchangeable bonds issued for $20 million that are to be exchanged for shares of Adam Inc. worth $20 million (therefore no gain or loss is realized on the exchange). Based solely on the facts provided above, what effect should the convertible bonds and exchangeable bonds have on an analyst’s assessment of Cameron’s fundamental debt to total capital ratio?
Convertible Bonds Exchangeable Bonds
A) No effect No effect
B) Increase Decrease
C) No effect Decrease
Correct answer is C)
As the conversion price is above the current share price by a reasonable margin (5/44 = 11%), it is unlikely that the bonds will be converted. Thus, there will be no effect on the debt to total capital ratio.
The exchangeable bond transaction has no gain or loss so there is no effect on equity. But the liabilities will be reduced by $20 million and so this will decrease the debt to total capital ratio.
Q4. Jones Inc. has a capital structure consisting of $8 million of liabilities and $10 million of equity. Included in liabilities is $1.2 million worth of exchangeable bonds. Immediately afterwards, Jones issues $0.7 million of redeemable preferred shares for cash proceeds and also calls its entire group of exchangeable bonds, netting a gain of $0.3 million on the bonds. Which of the following amounts is Jones’ revised debt to total capital ratio upon completion of the two new transactions?
A) 0.728.
B) 0.421.
C) 0.458.
Correct answer is B)
The $0.7 million of redeemable preferred shares are treated as debt and will increase liabilities.
The exchange of the bonds results in a decrease in liabilities of $1.2 million and a gain of $0.3 million. The latter results in an increase in equity by $0.3 million (the net effect of the two transactions also decreases assets by $0.9 million).
Liabilities = $8 million + $0.7 million - $1.2 million = $7.5 million
Equity = $10 million + $0.3 million = $10.3 million
Debt to total capital ratio = Liabilities / (Liabilities + Equity) = $7.5 million / ($7.5 million + $10.3 million) = 0.421.
[此贴子已经被作者于2010-11-6 14:18:24编辑过] | 
发表于 2010-11-6 14:18
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