QUESTION 4 [40] 4.1 Use the following convertible bond information to answer the questions that follow. Coupon Maturity 5.5% 15 June 2030 Annual dividend Conversion ratio R1.50 25 Current price of bond R985 Market price of underlying ordinary shares R38.50 4.1.1 Calculate the conversion value. 4.1.2 Calculate the conversion premium. (2) (2) 4.2 You purchased an annual interest coupon bond one year ago that now has 14 years remaining until maturity. The coupon rate of interest was 10% paid semi-annually and par value was R1 000. At the time you purchased the bond, the yield to maturity was 8%. 4.2.1 Calculate the price you paid for this bond one year ago. (3) 4.2.2 Would this be a par, premium or discount bond? Motivate your answer by providing two reasons. (2)