5. In the end of 2000, Libby issued 5.5% convertible bonds due in 2010. Each bond was convertible into 1,500 shares of Libby Inc. equity any time before maturity. When Libby issued the convertible bonds, its share price is 25. The conversion price is 35. Suppose that straight bond issued by Libby was priced to yield 6.5% per months in the end of 2000. four 1) Calculate the current value of the straight bond. (4 marks) 2) Briefly explain the term of conversion ratio and calculate the conversion value of the bond. (3 marks) 3) Illustrate and explain the floor value of the convertible bond. (6 marks) 4) What are call options and warrants? Outline the major differences between warrants and call options. (6 marks)