Conversion Ratio - 13.55; 24.50; 20.42; 18.96

Straight debt value - 1,200; 663.18; 505.22; 928.45

Value of the convertible - 336.82; 494.78; 71.55; -200.00

Consider the case of Cheung Zap Inc.: Cheung Zap Inc. Just issued 19-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 $48.96. Cheung's convertible bonds pay a 6.12% annual coupon, but if Cheung had issued straight-debt bonds (no conversion), it would have had to pay 10.20% 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: Value of the convertible option: per bond per bond Cheung's common stock currently sells for $26 per share. Would an investor want to convert the bonds now? Yes O No Suppose analysts expect Cheung to pay a dividend of $4.00 per share at the end of the year and for the dividend to grow at a constant rate of 5% per year. What is the expected conversion value five years from now? O $1,624.49 per share O $1,016.31 per share O $677.54 per share $508.16 per share