9. Reynolds Technology has a convertible bond outstanding, trading in the marketplace at $835. The par value is $1,000, the coupon rate is 9 percent, and the bond matures in 25 years. The conversion ratio is 20, and the company’s common stock is selling for $41 per share. Interest is paid semiannually.

a. What is the conversion value?

b. If similar bonds, which are not convertible, are currently yielding 12 percent, what is the pure bond value of this convertible bond? (Use semiannual analysis as described in Chapter 10.)