1- Reynolds Technology has a convertible bond outstanding, trading in the marketplace at $920. The par value is $1,000, the coupon rate is 8 percent, and the bond matures in 10 years. The conversion ratio is 40, and the company's common stock is selling for $22 per share. Interest is paid semiannually.

a.What is the conversion value?

b.If similar bonds, which are not convertible, are currently yielding 10 percent, what is the pure bond value of this convertible bond? (Use semiannual analysis.) UseAppendix BandAppendix Das an approximate answer, but calculate your final answer using the formula and financial calculator methods.

2- Pittsburgh Steel Company has a convertible bond outstanding, trading in the marketplace at $940. The par value is $1,000, the coupon rate is 8 percent, and the bond matures in 25 years. The conversion price is $55 and the company's common stock is selling for $48 per share. Interest is paid semiannually.

If the interest rate on similar bonds that are not convertible are currently yielding 12 percent, what will be the pure bond value of the Pittsburgh Steel Company bonds? (Use semiannual analysis.) UseAppendix BandAppendix Das an approximate answer, but calculate your final answer using the formula and financial calculator methods.