2. Our company needs to raise $10M in financing. The firm's straight non-convertible bonds currently yield 12%. Its stock sells for $90 per share and has an expected capital gains yield of 9% and an expected dividend yield of 5%. Investment bankers have proposed that the firm raise the needed financing by issuing convertible bonds. These would have a $1,000 par value, an annual coupon rate of 8%, a 5 -year maturity, and be convertible into 10 shares of common stock. The bonds would be noncallable for 3 years, after which they would be callable at a price of $1,000. Assume that the bonds may be called at the end of the year, immediately after the coupon payment. Also assume that management will call the bond if the conversion value exceeds 20% of par value. a. At what year do you expect the bonds to be forced into conversion with a call? b. What is the expected (before-tax) rate of return on the proposed convertible issue