Homework answers / question archive / SCENARIO A Bobby Ltd entered the following transactions during the year ended 31 December 20X6: On 1 January 20x6 the company issued a £10 million 2% convertible loan at par, with interest payable annually in arrears (Assume a discount factor of 8%)

SCENARIO A Bobby Ltd entered the following transactions during the year ended 31 December 20X6: On 1 January 20x6 the company issued a £10 million 2% convertible loan at par, with interest payable annually in arrears (Assume a discount factor of 8%)

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SCENARIO A Bobby Ltd entered the following transactions during the year ended 31 December 20X6: On 1 January 20x6 the company issued a £10 million 2% convertible loan at par, with interest payable annually in arrears (Assume a discount factor of 8%). The loan is repayable in full after four years on 31 December 20X9, or may be converted to equity on the basis of 70 shares per £100 of loan. On 15 December 20x6 Bobby Ltd purchased 100,000 shares in Cobby Ltd for £4.50 per share, incurring transaction fees of £15,000. These shares are held for trading purposes. As at 31 December 20X6, the shares are trading at £5 each. On 1 October 20X6 Bobby Ltd purchased 80,000 shares in Freddy Ltd (representing a 6% shareholding), for £5 per share, incurring transaction costs of £15,000. The present value of £1 payable at the end of the year, based on rates of 8% is as follows: End of year DF 8% 1 0.93 2 0.86 3 0.79 4 0.74 Which of the following is NOT a financial asset? - SCENARIO A Select one: a. Cash b. Trade Receivables C. Equity investment d. Prepayment for insurance