Cherry Corporation Sold $200,000 of 12% Bonds at Par

question 33

Multiple Choice

Cherry Corporation sold $200,000 of 12% bonds at par. Each $1,000 bond carried ten warrants, each of which allows the holder to acquire one share of $10 par common stock for $30 per share. After issuance, the bonds were quoted at 99 ex rights, and the warrants were quoted at $4 each. Cherry Corporation should have assigned to the rights a value of

• A) $8,000.
• B) $7,767.
• C) $7,500.
• D) $5,882.

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Definitions:

Musical

A genre of film or theater that incorporates music, songs, and dance routines into the narrative, often featuring elaborate production numbers.

Wisecracks

Clever, witty, often sarcastic remarks or comments made to amuse or provoke laughter.

Double Entendres

A phrase or statement that has two meanings, one of which is usually risqué or indecent.

Sound Era

Also known as the "talkies" era, it refers to the period in cinema history that followed the introduction of synchronized sound technology in film, marking the end of the silent film era.