Knowledge Check 01 Boyd Corp. issued $1,500,000 of 9% nonconvertible bonds at 107, due in 10 years. Each $1,000 bond was issued with 45 detachable stock warrants, each of which entitled the holder to purchase, for $70, one share of Boyd’s $40 par common stock. The market price of each warrant was $7. How much of the proceeds should be allocated to the warrants issued?

$472500

Explanation:

The following can be gotten based on the information given in the question:

The number of bonds issued will be:

= $1500000/$1000

= 1500 bonds

Fair value of warrant = $7

Number of stock warrants = 45

The proceed to be allocated to the warrant issued will be the total number of warrant for every bond multiplied by the number of bond that are issued which is also multiplied with the warrants market price. This will be:

= 45 × 1500 × 7

= $472,500

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.