What value should the equity element of the hybrid financial

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On 1 January 2021, Peridot Bhd issued 10,000 5% convertible bonds at their par value of RM50 each. The bonds will be redeemed on 1 January 2026. Each bond is convertible to equity shares at the option of the holder at any time during the five-year period. Interest on the bond will be paid annually in arrears. The prevailing market interest rate for similar debt without conversion options at the date of issue was 6%. The discount factor for 6% at year 5 is 0.747. The cumulative discount factor for years 1-5 at 6% is 4.212.

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Problem 1: At what value should the equity element of the hybrid financial instrument be recognised in the financial statements of Peridot Bhd at the date of issue?

Reference no: EM132907559

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