E- Nonconvertible bonds are selling with a yield to maturity of 8 percent. If this bond lacked the conversion feature, what would the approximate price of the bond be? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

F-What is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? Round your answer to the nearest dollar.

G-What is the probability that the corporation will call this bond?

Since the price of the stock is -Select-(less OR higher) than the exercise price of the bond, the probability of the bond being called is -Select(high OR virtually nilI).

Given the following information concerning a convertible bond: Principal: $1,000 Coupon: 6 percent Maturity: 14 years Call price: $1,055 Conversion price: $37 (that is, 27 shares) Market price of the common stock: $32 Market price of the bond: $1,030