Bond ABC is convertible into 30 shares of stock ABC. The bond pays 5.2% coupon (annually), has 8 years to maturity, $1000 par value, and 6.1% yield to maturity. Stock ABC currently trades at $25 and pays an annual dividend of $0.75 per share.

a.) What is themarketconversion price of bond ABC (i.e. conversion price given current market prices)? What does this number tell you?

b.) Currently, what is the conversion premium per share for bond ABC? What does this number tell you?

c.) What is the income differential per share for bond ABC? What does this number tell you?

d.) What is the premium payback period for bond ABC? What does this number tell you?