1.Compute the YTM for the Norfolk Southern bonds.

2.Compute the YTM for Cephalon bonds.

3.For Cephalon?s convertible bonds draw a ?payoff diagram.? That is, graph the value of a single $1000 note on May 1, 2014, as a function of Cephalon?s stock price on the same day, assuming that the note has not been converted by then. How does the ownership position of a convertible bond holder differ from that of a conventional bond holder or a common shareholder?