3rd Question: It May be Relevant for May 2011 Exam

Suresh Prasad (www.aubsp.com) (15630 Points)

31 January 2011  

Compound Financial Instrument

Question:

Spsmiter Pvt. Ltd. issued 15,000, 8% convertible debentures of100 (FV100) per debenture at par on 1st April 2011. The debentures are redeemable at a premium of 15 % as on 31st March, 2018 or these may be converted into Equity shares at the option of the debenture holders. In the market, the interest rate for equivalent debentures would be 11%.

 

            You are required to separate equity and debt portion as on 01.04.2011.

Try to solve this Prob. before downloading the Ans. and comment on the given Answer.