4. MOGEH Inc Description in 2006, Merrill Lynch became the lead book nrnner for a $5 billion convertible bond issue for MoGen, Inc., which was the single-largest convertible bond issuance in history. Merrill Lynch's Equity Derivatives Group needed to convince MoGen's management of the best coupon rate and conversion premium for NIon and the potential investors in the issue. This pricing decision requires students understand the concept of valuing a convertible as the sum of a straight bond plus the conversion option. Valuing the conversion option as a call option requires the estimation of the Black-Scholes model, with the volatility being a particularly challenging input. 1) How would you describe MoGen's Financing Strategy? 2) How important is the Share repurchase program to Mo Gen's choice to issue a convertible bond? 3) How can we use the Black Scholes model to value the conversion option premium (quantitative answer) 4) What coupon rate do you get for a 25% conversion premium