Convertible Bond Analysis

stock price was $$54$ per share. The bonds were subordinated debentures and were given an A rating; straight nonconvertible debentures of the same quality yielded about $9\mathrm{.}00\%$ at the time Roop's bonds were issued.

a$.$ Calculate the premium on the bonds $-$ that is$,$ the percentage excess of the conversion price over the stock price at the time of issue. Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

answer to two decimal places.

$

million per year

c$.$ At the time the bonds were issued, what was the value per bond of the conversion feature? Do not round intermediate calculations. Round your answer to the nearest cent.

$

per bond

of the straight$-$bond portion of the convertible bond? Do not round intermediate calculations. Round your answer to the nearest cent. Enter all amounts as a positive number.

$

What is the current value if a bondholder converts a bond? Do not round intermediate calculations. Round your answer to the nearest cent.

$

per share

Do you think it is likely that the bonds will be converted?

standard deviation of stock returns.$)$ Round your answers to the nearest cent. Enter all amounts as a positive number.

The value of straight bond would have

from $

at the time of issue to $

fifteen years later.

conditions, what is the current price of the straight$-$bond portion of the convertible bond? Do not round intermediate calculations. Round your answer to the nearest dollar. Enter all amounts as a positive number.

$

per bond

What is the current value if a bondholder converts a bond? Do not round intermediate calculations. Round your answer to the nearest cent.

$

per share

What do you think would have happened to the price of the bonds?