Q3

Determining values-Convertible bond Craig's Cake Company has an outstanding issue of 21 -year convertible bonds with a $800 par value. These bonds are convertible into 70 shares of common stock. They have a 13% annual coupon interest rate, whereas the interest rate on straight bonds of similar risk is\%. a. Calculate the straight bond value of this bond. b. Calculate the conversion (or stock) value of the bond when the market price is $8 per share of common stock. c. What is the minimum market value of the bond? a. The straight value of the bond is $ (Round to the nearest cent.)