- 20 Marks
SCS – March 2023 – L3 – Q6 – International financial management
Explains the financial reporting implications of debt exchange and compares investing in bonds versus shares
Question
LCH has invested GH¢1,000,000 in a 5-year Government of Ghana Bond with a coupon rate of 20%. As a result of the Government of Ghana DDE programme, LCH has no option but to exchange the old bond with the new bond.
Required:
a) Explain FIVE (5) financial reporting implications of the debt exchange on the financial statements of LCH as at 31 December 2022.
(10 marks)
b) Discuss FOUR (4) advantages and TWO (2) main disadvantages of investing in bonds rather than shares.
(10 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Bonds, Debt Exchange, Financial Reporting, Investment, Shares
- Level: Level 3
- Topic: International financial management
- Series: MAR 2023
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