Consider the case of Cheung Zap Inc.: Cheung Zap Inc. just issued 11-year convertible bonds at a par value of $1,000. At any time before maturity, investors have the option to exchange their bonds for shares of Cheung's common stock at a conversion price of $64.32. Cheung's convertible bonds pay a 8.04% annual coupon, but if Cheung had issued straight-debt bonds (no conversion), it would have had to pay 13.40% annual interest. Based on the information available, complete the table: Value Conversion ratio of Cheung's bond issue: Straight-debt value of this convertible debt issue: per bond Value of the convertible option: per bond Cheung's common stock currently sells for $28 per share. Would an investor want to convert the bonds now? Yes No Suppose analysts expect Cheung to pay a dividend of $4.50 per share at the end of the year and for the dividend to grow at a constant rate of 4% per year. What is the expected conversion value five years from now? $529.79 per share $397.34 per share $2,191.38 per share $794.69 per share