On May 1, 2011, Chloe Company issued $ 3,000,000, 20 years, 10% bonds for $ 2,420,000. Each S1,000 bond had a detachable warrant eligible for the purchase of one share of Chloe's $ 70 par ordinary share for $ 90. Immediately after the bonds were issued Chloe's had the following market value of:

Bonds without warrants 2,050

Warrant 30

Ordinary share 65

Requirements:

A. Determine the cost assigned to warrants.

Answer rating: 100% (QA)

A WARRANT is a long term security issued by a company which provides the holder with the rig... View the full answer