Vodafone Group Plc reports the following information among its bonds payable as
ID: 2425611 • Letter: V
Question
Vodafone Group Plc reports the following information among its bonds payable as of March 31, 2011 (pounds in millions).
Financial Long-Term Liabilities
Measured at Amortised Cost
What is the par value of the 4.625% bond issuance? (Enter your answer in millions.)
What is its book (carrying) value? (Enter your answer in millions.)
Financial Long-Term Liabilities
Measured at Amortised Cost
Value Carrying
Value Fair
Value 4.625% (US dollar 500 million) bond due July 2018 £ 311 £ 338 £ 327
Explanation / Answer
(All amounts for the bonds shown in $ million for answers) 1 GBP = 1.6033 USD a. The par value of the 4.625% bond issuance is =311 X 1.6033 = $ 499 million b. The book (carrying) value of the bonds is = 338 X 1.6033 = $ 542 million c. Since the carrying value of the bonds is more than its par value, hence the bonds were sold at a premium.
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