A company issues convertible bonds. The equity component is allocated

date：2025-12-24 21:45:32 author：admin browse： time View comments Add Collection

A company issues convertible bonds. The equity component is allocated

A company issues convertible bonds. The equity component is allocated:

A. Based on relative fair values at issuance

B. Based on par value

C. Based on market value of the bonds

D. Based on the conversion ratio

Answer: A

Explanation: ASC 470-20-40-1: The equity component is separated based on the fair value of the debt component and the residual amount assigned to equity.