3. A bond has a time to maturity of n=9yrs, a coupon rate of 7% (paid semi- annually), and a maturity value of M = 1000. The bond was issued six years ago. a. Suppose that the bond is convertible to common shares and that the conversion ratio is 40 shares. b. If the market price of shares is P. = $27.50, what is the conversion value of the bond? (7 points) c. If the market rate of interest is 9%, what is the straight bond value? (7 points) d. What is the intrinsic value of this bond? Will the bond trade for a little more than its intrinsic value and, if so, why? (6 points) e. Briefly explain the difference between a "callable and a puttable bond. Are they a form of derivative securities? (5 points)