eBook blem 15-01 en the following information concerning a convertible bond: Principal: $1,000 Coupon: 4 percent Maturity: 16 years . Cal price: $1,040 Conversion price: $39 (that is, 25 shares) Market price of the common stock: $35 Market price of the bond: $1,030 a. What is the current yield of this bond? Round your answer to two decimal places. 5. What is the value of the bond based on the market price of the common stock? Use the given above number of shares into which the bond may be converted. Round your answer to the nearest dollar $ c. What is the value of the common stock based on the market price of the bond? Use the given above number of shares into which the bond may be converted, Round your answer to the nearest cent $ d. What is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? Round your answer to the nearest dollar, $ c. Nonconvertible bonds are selling with a yield to maturity of 6 percent. If this bond tacked 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 $ 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 $ 9. What is the probability that the corporation will call this bond? Since the price of the stock is than the exercise price of the bond, the probability of the bond being called is Wwww wwmwww 14% TD 116 17 -- Interest Factors for the Present Value of One Dollar 7% 412 3% ww % M 610 552 742 Time Period year 14 19 - bron reDB Enum Interest Factors for the Present Value of an Annuity of One Dollar Time Period ROWN rea) 1 24 55 6% 7% 8% 9% 10% 12 14 16% 1 205 24% 28% 32% 35% 1 0.990 0,980 0.971 0.962 0.952 0943 0935 0.926 0917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0781 0.758 0735 2 1970 1942 1913 1.886 1.859 1.833 1.808 1.783 1759 1736 1.690 1647 1.605 1566 1.528 1.457 1.392 1.332 1.226 3 2941 2.884 2.829 2775 2.723 2673 2.624 2.577 2.531 2.487 2402 2322 2.246 2174 2106 1981 1868 1766 1674 4 3.902 3.808 3.717 3.630 3.546 3.465 3 387 3.312 3.240 3.170 3037 2914 2.798 2690 2.589 2.404 2.241 2.096 1.966 5 4.853 4713 4.580 4.452 4.329 4212 4.100 3.993 3.890 3.791 3.605 3.433 3274 3.122 2.991 2.745 2532 2345 2181 6 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3326 3.020 2.759 2.534 2399 7 6.728 6,472 6.230 6.002 5.786 5582 5.389 5.206 5.033 4868 4564 4.288 4039 3.812 3.605 3.242 2.937 2678 2455 8 7.652 7.325 7020 6.733 6.463 6.210 5971 5.747 5.535 5.335 4.968 4639 4,344 4078 3.837 3.421 3.076 2.786 2540 9 8.566 8.162 7786 7435 7108 6.802 6.515 6.247 5.985 5.759 5328 4946 4.607 4303 4,031 3.566 3.184 2868 2.603 10 9.471 8.983 8.530 8.111 7722 7.360 7024. 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10368 9.787 9.253 8.760 8.3067887 7.499 7139 6,805 6.495 5.988 5.453 5.029 4656 4327 3.776 3.335 2975 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7487 7.103 6.424 5.842 5.342 4910 4533 3912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.000 4.611 3.962 3.459 3,061 2.740 15 13865 12 849 11.938 11.118 10.380 9.712 9.108 8.559 8060 7606 6.811 6.142 5.57 5.092 4.675 4.001 3.483 3076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4,003 3503 3088 2.758 17 15562 14 292 13.166 12.166 11.274 10.477 9763 9.122 8.544 8.002 7.120 6373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.898 14.992 13.754 12.659 11690 10.828 10.059 9.372 8.756 8.201 7.250 6 467 5,818 5.273 4.812 4.000 3.529 3.104 2.767 19 17.226 15.678 14.324 13,134 12.085 11,158 10.336 9.604 8.950 8.365 7366 6.550 5.877 5.316 4 844 4097 3539 3.109 2770 20 18.046 16.751 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14,094 12.783 1654 10.675 9.823 9.077 7843 6.873 6.097 5467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15 373 13.765 12.409 11.258 10.274 9.427 8.055 7003 6.177 5517 4979 4.160 3.560 1.124 2.778