Determining valueslong dash Convertible bondCraig's Cake Company has an outstanding issue of 9 -year convertible bonds with a $500 par value. These bonds are convertible into 65 shares of common stock. They have a 11% annual coupon interest rate, whereas the interest rate on straight bonds of similar risk is 14%.

a.Calculate the straight bond value of this bond.

b. Calculate the conversion (or stock) value of the bond when the market price is $15 per share of common stock.

c.What is the minimum market value of the bond?