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b. To expand its business, Merryweather Ple issued a convertible bond to raise 120,000. The convertible bond has a face value of 100 and pays

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b. To expand its business, Merryweather Ple issued a convertible bond to raise 120,000. The convertible bond has a face value of 100 and pays a coupon rate of 5% with 10 years to maturity. The convertible bond is currently trading at a premium of 10%. If the firm has a bond rating of A and the yield to maturity on A-rated straight bond is 9% i. What is the value of the straight bond component? (5 marks) 1. What is the value of the equity component of the convertible bond

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