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2. Ray Corp. issued bonds with a face amount of $200,000. Each $1,000 bond contained
detachable stock warrants for 100 shares of Ray's common stock. Total proceeds from the
issue amounted to $240,000. The market value of each warrant was $2, and the market value
of the bonds without the warrants was $196,000. The bonds were issued at a discount of
(rounding the allocation percentage to two decimal places):
a. $0
b. $800
c. $4,000
d. $33,898
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