A convertible bond is selling at par ($1,000). The bond has 10 years to maturity and pays 6% annual coupon interest. Similar straight bonds (non-convertible) are priced to yield 8%. The bond's conversion ratio is 20 and the current stock price is $45. a) What is the value of an equivalent straight bond without a conversion option? b) Explain why there are investors who are willing to pay $1,000 for the convertible bond?