Note to Instructors:This case was originally based on the 1999 annual report of Home Depot, Inc.  The long-term debt note disclosures in more recent years have become less interesting from an accounting perspective (i.e., Home Depot no longer reports commercial paper, installment notes, or an unsecured bank loan, for instance.  Thus, to preserve the case, we changed the name to a fictional company).

a. ?The notes were converted into shares at a price of $15.3611, which means that approximately 71.80 million shares would have been issued in exchange for the notes ($1,103,000,000 / $15.3611). Note: Home and Office City’s footnote disclosures indicate that 72 million shares were actually issued—perhaps shares were also given in lieu of some accrued interest.