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(24) Bolivar Basic Industries (BBI) issue $1,000 face-value convertible bonds. The bonds have an original maturity of 10 years, but were issue 4 years ago

(24) Bolivar Basic Industries (BBI) issue $1,000 face-value convertible bonds. The bonds have an original maturity of 10 years, but were issue 4 years ago (there are 6 years to maturity). The bonds have a coupon rate of 6.2% and make semi-annual coupon payments. The bonds have a yield-to-maturity of 5.68%. The bonds are also convertible to 50 shares of stock with a 2% cost of conversion. What is the value of a BBI bond? If BBI stock currently sells for $20.50 would you be willing to convert the bonds?

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