Using a financial calculator or Excel functions, calculate the effective rate yield rate for the bonds. Round answer to
decimal places, eg
Effective rate
eTextbook and MediaOn September Crane Inc. issued $ of year, convertible bonds for $ The bonds pay interest on
March and September and mature on September Each $ bond can be converted into no par value common
shares. In addition, each bond included detachable warrants. Each warrant can be used to purchase one common share at an
exercise price of $ Immediately after the bond issuance, the warrants traded at $ each. Without the warrants and the conversion
rights, the bonds would have been expected to sell for $
On March half of the warrants were exercised. The common shares of Crane were trading at $ each on this day.
Immediately after the payment of interest on the bonds, on September all bonds outstanding were converted into common
shares. Assume the entity follows IFRS.
