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Sunland Corporation had net income of $50,600 for the year ended December 31, 2017, and a weighted average number of common shares outstanding of...
1. 7% convertible debt, 210 bonds each convertible into 43 common shares. The bonds were outstanding for the entire year. The income tax rate is 25%. The bonds were issued at par ($1,190 per bond). No bonds were converted during the year.
2. 3% convertible, cumulative $110 preferred shares, 1,100 shares issued and outstanding. Each preferred share is convertible into 2 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year.
QUESTION:
A)
B)
C)
When Sunland Corporation issued the 7% convertible debt, the company's interest rate on straight debt have been (GREATER than or LESS than) 7% ? (pick one)
