Dalia SA issues on 1 January, at par, bonds convertible into a fixed number of shares: proceeds of 1,200,000, repayment at par in 3 years, annual coupon of 60,000 paid at the end of each year. Case data, from management's judgement: a similar debt without a conversion option would be issued at a rate of 8 % (a rate not imposed by the standard). Calculate, one flow at a time, the present value of the principal and of each of the three coupons, then the liability component and the residual equity component.
- Issue proceeds (equal to the principal repayable)
- 1,200,000
- Annual coupon
- 60,000
- Rate of a similar debt without a conversion option
- 8 %
- Term until repayment
- 3