On January 1, 2019, Langdon & Co. issues bonds with a face value of $50,000 for $51,000. Each $1,000 bond carries 10 warrants, and each warrant allows the holder to acquire one share of $1 par common stock for $40 per share. Immediately after the issuance, the bonds are quoted at 99 ex rights and the warrants are quoted at $5 each. Calculate the value to be assigned to the bonds and to the warrants.

$48,548 to be assigned to the bonds, and $2,452 to the warrants

Explanation:

the value that should be assigned to the bonds is:

= [market value of bonds / (market value of bonds without warrants + market value of warrants)] x price at issuance

market value of bonds = 99 ex rights x 1,000 = $990

market value of warrants = $5 x 10 = $50

issuance price = $51,000

= [$990 / ($990 + $50)] x $51,000 = ($990 / $1,040) x $51,000 = 0.951923 x $51,000 = $48,548.08 ≈ $48,548

the value assigned to the warrants = $51,000 - $48,548 = $2,452

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

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